Reactivation Plan Necessary for Mexico’s Aviation Industry: AFACBy Alicia Arizpe | Mon, 05/25/2020 - 14:06
The virtual halt in travel and tourism caused by the COVID-19 outbreak has had catastrophic results for the aviation industry across the globe. Under these circumstances, Mexico’s Federal Agency of Civil Aviation (AFAC) is organizing a reactivation plan to ensure the local industry is prepared for “the new normal.”
The COVID-19 outbreak will lead to 1.5 billion less people traveling during 2020, according to the International Civil Aviation Organization (ICAO). This sharp decrease in traffic has heavily hurt the global aviation industry making some airlines to file for bankruptcy. Since the start of the outbreak, major airlines have had to implement pay cuts or layoffs to stay afloat. Others have not survived the crisis including Virgin Australia and Avianca, the second oldest airline in the world. Even though Mexico did not close its borders or restricted internal flights, local airlines were not spared. Luis Noriega, President of CANAERO, stated that Mexican airlines will lose US$5.3 billion due to the COVID-19 crisis, leaving 534,000 jobs at risk.
All local airlines have reported significant drops in demand for flights. Mexican airports have also seen a substantial decrease in the number of passengers, with Mexico’s largest aviation hub, Mexico City International Airport (AICM), reporting a 92.8 percent drop in passengers during April. Mexico’s airport groups have reported similar data. During the first quarter of 2020, the pandemic brought passengers of Mexico’s three airport groups, which jointly operate 34 of Mexico’s largest national and international airports, significant drops in passengers. For April 2020, Grupo Aeroportuario de Sureste (ASUR), reported a 95.7 percent drop in traffic in Mexican airports, Grupo Aeroportuario Centro Norte (OMA) reported a 92.8 percent drop while Grupo Aeroportuario del Pacífico (GAP) reported 91.5 percent drop.
These sharp drops in passengers have raised alarms in the industry, leading to calls for support from government institutions. Mexico’s airline association CANAERO had requested support from the federal government to help Mexico’s ailing aviation industry in the form of tax relief and other stimuli, but has yet to receive an answer. In the meantime, the country’s recently recreated AFAC is developing a reactivation plan that aims to help the industry recover. The organization has asked airlines and airport operators to compile and present updated information of their financial status, including results for the first half of 2020 and debt, and capabilities to prove their viability to continue operating. The agency is also requiring airlines and operators to implement all necessary sanitary measures to prevent the spread of COVID-19 and guarantee the safety of crew and passengers. This plan follows Mexico’s “Reopening Strategy” presented in May 13 by the federal government which according to AFAC, should be implemented before companies restart their operations.