The President of Mexico recently made a statement that created a slight controversy in the aviation industry. Lopez Obrador, President, of Mexico said: “The country should open aviation, open the competition, and allow foreign airlines to enter the Mexican domestic market, that’s democracy. Let foreign airlines come in from Europe and the United States so that they can operate flights inside the country.”
This statement has certainly piqued the attention of the international aviation industry as Mexico is a popular tourist destination.
As most countries do not allow international airlines to operate domestic services within their territories to protect their domestic carriers- Mexico being one of them.
According to sources, by allowing international carriers, the President’s intention might be to boost air traffic and tourism giving the passenger a wide range of travel options. New routes will allow more tourists to visit their favorite destinations in Mexico with fewer layovers and at a cheaper price.
Interestingly, Mexico is one of the few markets worldwide to have fully rebounded, in terms of traffic, from the COVID-19 pandemic. According to the data released by Mexico’s Infrastructure, Communications, and Transportations Secretariat (SICT) Mexico had 77.89 million passengers in the first nine months of 2022.
Many American Airlines are already serving non-stop flights to Mexico, like American Airlines, United Airlines, Delta Air Lines, JetBlue, Southwest, Spirit, and Frontier, and will probably be interested in serving domestic routes.
Currently, only domestic carriers like Aeromexico, Viva Aerobus, Volaris, and regional airlines like Aeromar and Aéreo Calafia operate in Mexico. International airlines can land in Mexican cities but cannot offer internal connections
While regional airlines in Mexico are reeling under financial burden, only airlines like Aeromexico, Viva Aerobus, and Volaris have started performing above pandemic levels. But all three airlines posted net losses in Q3, 2022 due to an increase in fuel prices and economic uncertainty. Moreover, Mexico is downgraded to Category 2 status by the Federal Aviation Administration (FAA), impacting the industry.
The Presidents statement is drawing a mixed reaction from the aviation industry as some feel allowing international carriers might give more boost to travel and tourism in Mexico along with adequate utilization of infrastructure while some other feels that instead of allowing the international airlines to enter, the Mexican government should incentivize and improve the domestic aviation industry.
As of now, it will be interesting to follow which way will the Mexican government go.