Flight delay: Will Mexico’s low FAA rating hurt tourism? | Aviation News


With many newly vaccinated Americans making vacation plans after a year of staying home, Mexico remains one of the most popular international destinations, and the country’s besieged tourism industry is poised for the boost so necessary.

About 10.5 million U.S. tourists visit Mexico in a typical year, and tourism explains 8.7 percent of Mexico’s economy, according to the Organization for Economic Co-operation and Development. After the coronavirus pandemic took a major toll on tourist revenue in 2020, Mexico is looking forward to welcoming visitors again.

But the sky between Mexico and the United States could be a little calmer than expected in the coming months after the U.S. Federal Aviation Administration (FAA) last month lowered Mexico’s air safety rating from the first category to the second.

Economic strategist Carlos Torres, of the Strategic Affairs consulting group, said there could be serious consequences for the Mexican economy as a result.

“The airline industry has experienced a very difficult time in the last year, with a historic drop in passenger traffic,” Torres told Al Jazeera, explaining that the downgrade came at a time when the Economic recovery and the holiday season in the US would otherwise drive more people to fly to Mexico.

With Mexican airlines prevented from adding more routes, “this positive growth in passenger traffic will not be met by Mexican airlines,” he explained.

Mexican airlines such as budget company Volaris will not be able to add new routes to the United States at a time when demand is rising [Courtesy: George Hamlin]

The FAA reduction also means that Mexican airlines will be prohibited from sharing codes with U.S. airlines until the FAA is satisfied that the country’s aviation authority, the Federal Civil Aviation Agency or AFAC, is complying. fully the safety standards established by the International Civil Aviation Organization (ICAO), a specialized agency of the United Nations. The standards refer to technical experience, staff training, document registration, inspection procedures and security troubleshooting.

Madhu Unnikrishnan is editor of Airline Weekly, which covers the commercial aviation industry, and Skift, a media company focused on the travel industry.

He said that while degradation is best considered “a government-to-government technical problem,” the decision is likely to have an impact on Mexican airlines’ bottom lines, preventing them from capturing a growing market at a critical time. .

“Mexican airlines cannot add new flights to the United States just as it begins to take demand, which could affect them [those airlines’] the ability to capture part of this growing market, ”Unnikrishnan told Al Jazeera. “And maybe American airlines will step in to fill the gap.”

Qualification results

AFAC said in a press release that it intends to “recover category 1 as soon as possible,” and Mexico’s deputy transport minister, Carlos Moran, told Reuters news agency that he hopes it will be in three months.

Mexican President Andres Manuel Lopez Obrador said the national authority would follow FAA requirements, but struck a blow at the United States in the process.

“Sometimes, there are countries that feel like the governments of the world; they forget that the world has about 200 free, independent, sovereign countries, so they set themselves up as juries, they describe everything, ”he said at his May 27 press conference.

Shares of Mexican airline Aeromexico fell nearly 10 percent after the U.S. Federal Aviation Administration announced the rebate [File: Ted S. Warren/AP Photo]

But there was nothing directed about the rebate, said travel industry analyst Henry Harteveldt, chairman of research group Atmosphere.

“It’s not like the United States says, ‘Let’s go to Mexico.’ It was just Mexico’s turn to review it,” Harteveldt told Al Jazeera.

“It is in the best interest of the United States to ensure that the security issue is resolved,” he added. “Right now, travel between the U.S. and Mexico represents the biggest international destination for American travelers: there’s a lot of trade, tourism, business travel, air cargo, and a lot more moving by companies. between the two countries “.

In its statement, the Mexican authority AFAC noted that the aviation sector had no staff at the time of the FAA assessment, which was conducted between October 2020 and February 2021.

It was also during these months that Mexico had among the highest numbers of COVID-19 infections and deaths in the world.

‘Consumers have nothing to worry about; shareholders do ‘

Mexico is still battling the pandemic and its vaccination program has been steady but slow. So far, only 10% of the population has been vaccinated, according to the Johns Hopkins University Coronavirus Resource Center, and the country averages about 900 new cases a day, well below the all-time high. from 28,115 in October.

Basic data on beach holidays in Mexico, such as Cancun and Puerto Vallarta resorts, show that bookings currently exceed 2019 levels [File: Emilio Espejel/AP Photo]

But Unnikrishnan does not expect the degradation of FAA security to greatly affect Mexican tourism, especially with the “significant accumulated demand for travel to the United States.”

“It’s important to remember that this is a downgrade from Mexico’s civil aviation regulator and not from Mexico Airlines,” which may continue to operate the same number of flights as before the downgrade, he said.

He noted that Skift data for beach vacations in Mexico, such as Cancun and Puerto Vallarta resorts, show that bookings currently exceed 2019 levels.

“I don’t think any impact is leaking down to the consumer level,” Unnikrishnan said. “People when they make travel decisions don’t really think, ‘Oh, well, that civil aviation regulator in this country has been downgraded to second category.’

When the FAA downgraded the aviation authorities of Costa Rica in 2019 and Indonesia in 2007, for example, “people were still going to Bali, people were still going on their beach vacations and adventure,” he said.

But there may be more specific implications for individual airlines, explained Unnikrishnan, such as Aeromexico, which has a joint venture with US company Delta Air Lines.

Tourism represents more than 8% of the Mexican economy and workers in the sector want to recover after a hard 2020 [File: Emilio Espejel/AP Photo]

The two companies were in the middle of a negotiation, he said, and “this puts everything on ice until the civil aviation regulator is re-classified in the first category,” with Aeromexico “in debt” that maintains the relationship Delta for your future financial success. ”

Shares of Mexican airline Aeromexico fell nearly 10 percent after the announcement of the downgrade.

“Consumers have nothing to worry about, shareholders do,” Unnikrishnan said.

For Torres, the situation should worry the president of Mexico more.

“The aeronautical industry represents approximately three percent of the country’s GDP [gross domestic product], mainly because of tourism, “he said.” The US market accounts for 70 percent of flight and passenger traffic. What if it takes a long time to lift the rebate? “

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