- Mexico set to become the largest aviation market in Latin America in 2023.
- Study commissioned by IBS Software lists the positive factors driving the industry, such as the recovery of Category 1, nearshoring, strong demand in the Mexico-United States market and a large untapped and underutilized market.
- The main driver of growth in the Mexican aviation industry should be fueled by the Category 1 recovery with the United States.
Cancun, October 23, 2023 - Following the recent restoration of Category 1 status to the Mexican government, the highest safety rating, the country's aviation industry has a golden opportunity to establish itself as the most important market in Latin America and the Caribbean. However, to realize the country's full potential, close collaboration between the government and the private sector is required, along with a state aviation policy that establishes clear rules, has transparent regulation and ensures investment in infrastructure and efficient processes.
IBS Software, in collaboration with the Latin American and Caribbean Air Transport Association (ALTA), published the report The Mexican aviation sector: what’s next after regaining Category 1? Challenges and Trends, which analyzes the current state of the Mexican aviation industry in a post-pandemic, post-Category 2 and fast-growing context for its three major airlines, Aeromexico, Viva Aerobus, and Volaris. Erica Quiroz, Director for Latin America at IBS Software, highlighted the resurgence of Mexican airlines in the post-pandemic period and emphasized the sustained appetite for the aviation sector and growth potential in Mexico.
"Mexico still holds significant untapped growth potential, particularly with the increase in global air travel. Within the region, Mexico stands as a leader in international passenger volumes, recording 49.6 million passengers in 2022. In comparison, the countries with the highest international passenger numbers last year – Brazil, the Dominican Republic, and Colombia – registered 15.4 million, 15.5 million, and 15.1 million, respectively. Notably, international travel constitutes half of Mexico's total air traffic and contributes to 22% of the regional air traffic," said José Ricardo Botelho, CEO of ALTA.
A State aviation policy is required
For the Mexican aviation industry to consolidate its growth, it requires constant and close collaboration with the current and future governments. Achieving this is possible through the development of a state aviation policy that emphasizes the sector's importance, has appropriate regulation and promotes investment, competitiveness and efficient processes – by doing so, a strategic industry for the national economy can be protected. Additionally, experts interviewed in the report agreed on the need to strengthen the aviation authority, the Federal Civil Aviation Agency (AFAC).
This State policy also needs to consider promoting sustainability and meeting the net-zero carbon dioxide (CO2) emissions goals set by the global aviation industry. Despite having significant natural resource potential, Mexico lacks the proper infrastructure to promote the development and use of Sustainable Aviation Fuels (SAF), which are vital for the aviation industry to achieve net-zero carbon by 2050.
Future outlook
Following the recovery of Category 1, Mexican airlines can expand their routes, capacity and growth plans to the United States, regaining market share from their American counterparts. Likewise, Mexican airports will benefit from the reinstatement of Category 1 and other macroeconomic factors, such as the strength of new trends such as nearshoring and remote work.
The growth potential in flights to the United States has already been observed in the weeks following the announcement by the Federal Aviation Administration (FAA), with recent announcements from Viva Aerobus and Grupo Aeromexico regarding 25+ new routes from Mexican airports (including two from Felipe Ángeles International Airport).
Mexico is in a unique position to consolidate its leadership in aviation and ensure a prosperous future for this crucial industry. The actions to be taken must be coordinated and strategic to make the most of this opportunity, concluded Erica Quiroz.
