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News Article

Mexican Aviation Industry: the Strongest in Latin America

By Emilio Aristegui | Thu, 10/28/2021 - 11:50

The Mexican aviation industry has struggled to recover after the 2020 crisis. However, a Deutsche Bank report indicates that Mexico’s aerospace industry has proved to be the most resilient in fighting the effects of the COVID-19 pandemic among all Latin American countries.

Deutsche Bank’s Analyst Michael Linenberg highlighted the strength of the Mexican aviation industry during the annual Airline Leaders Forum held in Bogota, Colombia. “The best performing market in Latin America is Mexico, its numbers are between 15 percent and 25 percent higher when compared to 2019.”

The forum was organized by the Latin American and Caribbean Air Transport Association (ALTA) to support the region’s aviation industry as the reopening of borders continues and flight operations begin to catch up with their pre-pandemic numbers. But the damage caused by the 2020 lockdown continues to drag airlines down. Several airlines in the region are going through major financial restructuring processes. For example, Aeroméxico filed for Bankruptcy Protection Chapter 11 at a US Court last year but has already obtained approval for its Joint Plan of Reorganization, as reported by MBN.

Overall, the region is recovering, as airlines are now flying at 65 percent of their 2019 levels, said ALTA. However, some Mexican airlines even surpassed their pre-pandemic numbers, taking major strides in tackling the industry’s crisis as reported by MBN.

Airlines in the region are expected to reach profitability in 2023, said Linenberg. The analyst stated that Aeroméxico’s restructuring process should go on successfully for the airline to regain stability to regain its place as one of the leaders in the aviation industry. Aeroméxico is fully aware of the importance of this restructuring: “The Company will continue to strengthen its financial position and liquidity, protect and preserve its operations and assets, and implement necessary adjustments to mitigate the effects of COVID-19.”

Mexico’s focus is settled on recovering the FAA’s Category 1 rating as soon as possible. With the recent downgrade, the country’s airlines have seen major complications as they seek to open new routes to the US. As reported by MBN, the FAA’s regulations do not allow Mexican airlines to open new routes into the US, making the recovery of the Mexican aviation industry much more complex. However, the downgrade of category still allows Mexico to continue with their previous scheduled flights to the US.

The data used in this article was sourced from:  
MB, A21, ALTA, Aeromexico, FAA
Emilio Aristegui Emilio Aristegui Junior Journalist and Industry Analyst