Aeromexico BOG scaled
On Friday it was reported by local media outlet El Financiero that Mexico is regaining Category 1 status with the Federal Aviation Administration (FAA) after two years downgraded.
Regaining Category 1 status
Today, the Mexican newspaper El Financiero announced Mexico is restoring its Category 1 status after an audit took place this week, citing sources from the country’s Secretariat of Infrastructure, Communications and Transportation (SICT).
Neither the FAA nor the SICT have officially released any statement on the subject. When I requested information from the FAA, the US agency sent their latest attributable statement: We continue to provide assistance to Mexico’s civil aviation authority.
If the reports are confirmed, Mexico will emerge from a two-year downgrade which has vastly impacted the local civil aviation industry. Mexican airlines have not been able to launch new routes nor add new planes to the United States, meaning they have had to open routes and distribute capacity elsewhere, with the domestic and regional markets gaining the most attention.
Regaining the Category 1 status was a priority for the Mexican civil aviation industry which has had a strong recovery from the COVID-19 pandemic, posting record traffic numbers in 2022, and continuing with the strong performance this year.
Mexico’s Impressive 20% Growth In 2023
The Mexican civil aviation industry is on a roll in 2023 despite the country facing complex challenges such as the Category 2 degradation by the Federal Aviation Administration (FAA) and economic uncertainty. According to data from the SICT, the North American country had 38.9 million passengers between January and April 2023, an impressive 20% growth versus the same period last year.
The importance of the US market
The Mexico-US market is the most important globally, according to several reports. This year, the market has received 12.7 million passengers, well above pre-pandemic levels, and an 11.5% growth versus the same period in 2021 (11.3 million passengers).
Nonetheless, the downgrade to Category 2 status deeply impacted the performance of the Mexican airlines which couldn’t maintain their market shares against US-based airlines.
As of April 2023, American Airlines held a 19.4% market share. It was followed by United Airlines (14.6%), Volaris (13.5%), Delta Air Lines (12.1%), and Aeromexico (7.6%). In total, Mexican carriers held a 25.7% market share in the Mexico-US market.
Now that the country seems to have recovered Category 1 status, Mexican airlines can resume launching new routes to the United States; they can also use new planes (received after the downgrade) on routes to this country. We should also take a look at possible developments in the partnerships between Aeromexico and Delta, Volaris and Frontier Airlines and the possible Joint Venture Agreement (still under the DOT’s scope) between Viva Aerobus and Allegiant Air.
Interesting times are coming.
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