Photo: Daniel Martínez Garbuno.
It has been almost a year and a half since the Federal Aviation Administration (FAA) downgraded Mexico’s safety rating to Category 2. The current Mexican administration has been unable to restore the previous status, which has profoundly impacted the local carriers since they can’t add new flights or planes in commercial services to the United States. Let’s take a deeper look at Category 2 impact on Mexico.
Not many planes allowed
This week, José Humberto Gual Ángeles, the general secretary of Mexico’s pilot union (ASPA), urged the local authorities to regain Category 1 status. He added that the Mexican aviation industry can’t grow while it remains in Category 2.
“Despite having one of the most modern aviation industries in the world, today we have more than 70 next-gen aircraft that are unable to fly to the United States because we have been downgraded,” he added.
Aeromexico, Volaris, and Viva Aerobus have been recently adding new aircraft, either Boeing 737 MAX or Boeing 787 Dreamliners for the first or Airbus A320neo and A321neo for the two ultra-low-cost carriers. Despite being brand new and highly effective, these jetliners are banned from flying to the United States. Instead, the airlines have to deploy them on domestic and other international routes.
More power to US carriers
A recent study in Mexico has found out that local airlines have lost around nine billion pesos (US$450 million) in revenues due to the country being downgraded to Category 2 status. Moreover, they have also lost the opportunity to carry up to 2.3 million passengers that either have been lost or have traveled with US carriers.
US carriers have been increasing their market share. As of August 2022, American Airlines held a 21%, followed by United Airlines with a 15.1%. The Mexican ultra-low-cost carrier Volaris had a 12.2% share, while Delta Air Lines and Aeromexico held a 9.8% and a 9.4% share, respectively. Overall, Mexican carriers have around a 26% share of the market, having lost a key airline such as Interjet in 2020.
When will Mexico regain Category 1 status?
The big question here is when will Mexico restore its Category 1 status? The last time Mexico was downgraded, it only took the then-government four months to solve all the issues found by the FAA in its International Aviation Safety Assessment (IASA) program. This time, things have looked a lot different.
In June, the Mexican government said it expected to regain Category 1 status by the end of the year after having seven high-level meetings with members of the FAA. Nonetheless, the current expectation is that Mexico could solve all the pending issues and regain Category 1 status in 2023 at the earliest.
In the meantime, the Mexican airlines will continue to lose market share and revenues to the US-based airlines. Viva Aerobus has already stated that it had to suspend the launch of seven routes; Volaris had to pushback the launch of a route between Mexico City’s new Felipe Ángeles International Airport (NLU) and Los Angeles International Airport; Aeromexico’s CEO has said the company has received 40 new planes but can’t deploy them in routes to the United States. Instead, it has to use older, more expensive jetliners.
