Aerospace Industry Poised for Growth Despite Challenges

The national aerospace industry is expected to grow from US$2.65 billion in 2023 to US$3 billion by 2030, marking a 14.7% increase from 2025 projections, according to forecasts by the Mexican-German Chamber of Commerce and Industry (CAMEXA).

Mexico ranks as the world’s 10th-largest aerospace producer, specializing in the production of aircraft components for final assembly lines in the United States and Canada. The chamber noted that European companies are increasingly investing in the country, drawn by its skilled labor force and strategic positioning. "The Mexican aerospace industry has become a key player in the global market, leveraging its strategic geographic location, highly skilled workforce, and strong government support to establish itself as a major supplier to leading aerospace manufacturers," CAMEXA stated.

Among those expanding operations are Diehl Aviation, Safran, and ITP Aero. In late 2022, Safran Aircraft Engines Mexico inaugurated an extension at its Queretaro facility, investing MX$720 million and creating 128 specialized jobs. The company described this expansion as a strategic move to grow assembly operations for the A320 aircraft family.

CAMEXA's outlook aligns with projections from the Mexican Federation of the Aerospace Industry (FEMIA), which anticipates over 10% growth in the sector despite challenges from the Donald Trump administration, driven by sustained global demand for aircraft.

Donald Trump’s Impact on Mexico’s Aerospace Industry

The proposed 25% tariffs on imports from Mexico and Canada by President Donald Trump could significantly affect both US and Mexican consumers, potentially leading to a 5% increase in airline ticket prices, according to industry leaders and experts. “As the cost of an aircraft rises for the airline, whether it is purchased or leased, this increase will inevitably reach ticket prices to offset the added expense,” explained Luis Lizcano, President, FEMIA.

The National Chamber of Air Transport (CANAERO) reports that an airline ticket price is currently broken down into operational and labor costs at 43%, airport use fees at 34.9%, fuel at 15.6%, and general airport services at 6.5%. In addition, steel and aluminum contribute 10% to 25% of the costs to produce key aircraft components, such as wings and fuselages, while BTX Global Logistics estimates that electronic parts make up 20%  to 30% of the total cost.

“This is essentially a domino effect. When a tax is levied on essential materials for building an aircraft, it inevitably impacts passengers. The increase in aircraft costs will drive up ticket prices, which could negatively affect tourism and reduce travel demand,” said Fernando Gómez Suárez, Professor, Universidad Iberoamericana.