Challenges Accumulate as Aviation Industry Seeks Recovery

A new OAG report forecasts that the global aviation industry will not see a recovery until 2024. Moreover, the recent downgrade of Mexico’s airspace to Category 2 further complicates the recovery of local airlines.

The recovery of the global aviation industry is advancing at a much slower pace than expected, said John Grant, analyst at OAG, on a recent report. “Total capacity to the year’s end is currently standing at 3.7 billion seats compared to the 3.2 billion scheduled in 2020, a 15 percent increase in what was supposed to be the bounce-back year.” Global capacity has recovered from 2020, but airlines continue to face flight regulations while holding air routes until restrictions are lifted on several countries. Grant assures “It may take until 2024 at the earliest for a full aviation recovery to be seen in terms of demand.”

Rene Espinoza, President of the Mexican Federation of the Aerospace Industry (FEMIA), estimates a similar date for the recovery of the aviation industry after highlighting a minor but important growth of 6 to 10 percent compared to 2020, as reported by MBN. “It is a small recovery that gives us confidence that we will take back our pre-pandemic numbers in 2024.” The slow-paced growth has been a major challenge for the industry, which now seems to be set on the 2024 agenda.

Mexico’s recent downgrade to a Category 2 airspace represents a major challenge for the industry as the FAA reports on the recent resolution. “While the new rating allows Mexican air carriers to continue existing service to the US, it prohibits any new services and routes. US airlines will no longer be able to market and sell tickets with their names and designator codes on Mexican-operated flights. The FAA will increase its scrutiny of Mexican airline flights to the US.” These new regulations damage Mexican airlines, which will not be able to recover as fast as expected if they are unable to open new routes and grow their market.

The downgrade of the Mexican aerospace means “that the country’s laws or regulations lack the necessary requirements to oversee the country’s air carriers in accordance with minimum international safety standards, or the civil aviation authority is lacking in one or more areas such as technical expertise, trained personnel, record keeping, inspection procedures or resolution of safety concerns,” as reported by MBN. The scrutiny of Mexican airlines and flights to Mexico represents a major concern for the industry as airlines work to regain their 2019 numbers. The recovery of the Category 1 airspace is now a priority for the sector.