Restarting Mexico’s Aerospace Industry a Priority for FAMEXWed, 07/15/2020 - 13:14
Q: How has the COVID-19 outbreak impacted the aerospace industry in Mexico and the world?
A: Before the pandemic, the global aerospace industry was predicted to grow at an 8 percent annual rate during the next 20 years. Major industry players expected that the world would require over 47,000 new aircraft, generating US$5.8 trillion for the entire sector. However, the COVID-19 pandemic led to shutdowns of major aerospace players, including Boeing, Airbus, Safran, Gulfstream and Honeywell. Moreover, partial and complete border closures in Europe and North America led to a polarization of the aerospace industry. At this point, about 90 percent of the commercial aircraft in the world and 88 percent of Mexico’s 355 airplanes have been grounded, leading to a reduction in aircraft orders. Earlier in the year, the International Air Transport Association (IATA) calculated that the industry could lose US$113 billion in revenue in 2020, only to update this number to US$419 billion in June. This situation has led to the most profound recession the aerospace industry has ever faced.
The aerospace industry is international, with Mexico producing parts that will be used in many aircraft around the world. For instance, Safran’s plant in Chihuahua manufactures harnesses for most Airbus and Boeing aircraft. This deep interconnection means that the local industry will also be hurt by the problems the sector is facing at an international level.
Q: What role will FAMEX play in reactivating Mexico’s aerospace industry?
A: Mexico had previously built a reputation for its automotive and electric industries. While the country had gradually built its aerospace capabilities, FAMEX highlighted the industry’s importance at an international level. The event has contributed to the development of Mexico’s aerospace industry. Before FAMEX, the industry had been growing at a 12-14 percent rate and after the event was inaugurated, aerospace companies grew at up to 18 percent rates. In 2019, local aerospace exports amounted to US$9.6 billion and if not for the COVID-19 outbreak, the sector would have hit its US$12 billion goal in 2020.
FAMEX aims to reactivate the sector and communicate that Mexico has a strong aerospace industry with almost 400 companies, including OEMs and Tiers 1 to 4. The country also has a strong supply chain and is capable of absorbing more companies willing to establish in the country. FAMEX will be the first main event for the industry as we enter the new normal. While Mexico has been dealing with an aggressive virus, it is necessary to open our economy. This event will help to reposition the country, which is the 12th-leading aerospace producer and the 15th-largest economy in the world.
Q: How can Mexico capitalize on its strengths to further develop its aerospace sector?
A: Mexico is already an attractive destination for the aerospace industry thanks to its closeness to the US, over 40 free trade agreements, a young and qualified labor force and excellent academic institutions and research centers. COVID-19 highlighted the challenges companies from the EU and US face in having a remote supply chain spread all the way to China. Mexico has an opportunity to capitalize on the trade issues the US is having with China and the EU to strengthen its position in the aerospace supply chain. Mexico is close to many Airbus and Boeing plants located in the US and hosts the local plants of major players such as Bombardier.
Q: How has SEDENA streamlined FAMEX’s move from Santa Lucia to Queretaro Intercontinental Airport (AIQ)?
A: Queretaro was chosen because it is the fourth-leading destination for aerospace investment in the world and the state’s commitment to the development of the industry. Gov. Francisco Domínguez has participated in most aerospace events that occurred during his administration. The Municipal President of Colon, which is home to AIQ and two industrial parks with aerospace capabilities, has also promoted the sector. Queretaro has an active aerospace sector with 85 companies, including major players, such as Bombardier, Safran, GE and Airbus, and many projects that will help it to continue growing. While FAMEX will be hosted in Queretaro, it is a national event that will represent companies from the entire country.
It will be necessary to modify several areas at AIQ to be able to host all of FAMEX’s infrastructure and attendees. To this end, it was necessary to develop a specialized committee, including all the state’s ministers of economy, culture, development, safety and tourism. The committee also incorporates representatives from the industry and academia. FAMEX’s organization has advanced successfully and to date 63 percent of our expo area stands have been officially booked and many more are pending confirmation.
Q: How will FAMEX continue strengthening Mexico’s aerospace industry?
A: FAMEX provides essential support to the aerospace industry by giving the sector a meeting space for all companies, aeroclusters, embassies and representatives from over 40 different countries. FAMEX 2019 hosted 5,800 B2B meetings over three days and allowed the generation of several important agreements, including one between FEMIA and Indonesia’s aviation industry, another between CONCAMIN and the French Aerospace Industries Association (GIFAS) and one between INDEX and FEMIA. FAMEX’s second edition allowed it to become the second most important event for the aerospace industry in Latin America and its third edition will turn it into the most important happening in the region.
FAMEX will continue to represent Mexico’s aerospace industry at a global level. The event will foster efforts to continue providing tailored solutions to the sector through initiatives like the Aerospace Education Forum, Summit of University Deans, Aviation Safety Meeting and Foreign Investment Seminar. The US will be the guest of honor at FAMEX 2021, although we will also host pavilions from France, Hannover, China and the Czech Republic. FAMEX is now part of the sectorial plan of the National Ministry of Defense. In its Pro-Aereo 2.0 plan, the Ministry of Economy included FAMEX as the only support to the aerospace industry from the federal government.
The event will follow all of WHO’s recommendations to avoid the spread of COVID-19, including the use of nebulizers, constant sanitization of all installations, use of hand sanitizer and masks by all attendees and the provision of air and land ambulances to take anyone showing symptoms to receive the necessary medical attention.