The Year In Aerospace: Mexico Balances Growth, Risks Into 2026

Mexico’s aerospace sector closed 2025 at the intersection of strong demand, structural constraints and rising geopolitical risk, as airlines, airports and manufacturers navigated capacity limits, trade tensions and regulatory uncertainty ahead of the 2026 FIFA World Cup and the upcoming USMCA review.

Passenger traffic continued to grow across domestic and international markets, while load factors reached record levels globally, underscoring persistent aircraft shortages driven by production delays and engine inspection programs. Airport operators accelerated investment to modernize infrastructure, particularly in Mexico City, even as traffic distribution between Mexico City International Airport (AICM) and Felipe Ángeles International Airport (AIFA) remained uneven.

At the same time, US tariff measures on metals and aviation components reshaped cost structures for manufacturers and suppliers deeply integrated into North American supply chains. Sustainability targets added further pressure, with limited sustainable aviation fuel (SAF) availability in Latin America exposing airlines to long-term cost and compliance risks. Against this backdrop, consolidation moves, state intervention and renewed industrial investment highlighted both the resilience of Mexico’s aerospace ecosystem and the strategic decisions shaping its medium-term trajectory.

Global Airline Performance and Structural Constraints

The global airline industry ended 2025 with sustained demand growth and improving financial results, although structural constraints continued to limit capacity expansion. The International Air Transport Association (IATA) projects global airlines will generate a combined net profit  of US$41 billion in 2026, up from US$39.5 billion in 2025, maintaining a net margin of 3.9%.

Passenger volumes are expected to reach 5.2 billion, with an average load factor of 83.8%, while total industry revenue is forecast at US$1.053 trillion. Air cargo volumes are projected at 71.6 million metric tons.

Despite these gains, aircraft availability remains a binding constraint. IATA Director General Willie Walsh said manufacturers must address persistent production shortfalls. “The backlog of more than 17,000 aircraft orders that we reached in 2025 must be reduced in 2026,” Walsh said. According to IATA and consulting firm Oliver Wyman, disruptions in aircraft production are expected to cost the aviation industry more than US$11 billion in 2025, reflecting delays linked to engine recalls, supply chain bottlenecks and labor constraints.

Latin American airlines posted a 4.4% year-on-year increase in demand, with capacity up 4.7% and a load factor of 83.9%, according to IATA. Despite operational constraints, the region led global punctuality rankings in 2025, with Aeroméxico named the world’s most punctual airline and airports in Chile, Panama and Ecuador topping their respective categories.

Mexico’s Airline Market: Growth, Consolidation and Operational Disruption

Mexico’s air transport market expanded at a moderate but steady pace in 2025. IATA data shows domestic passenger traffic grew 3.2% year over year between January and October, standing 18.8% above 2019 levels. International traffic increased 4% from the prior year and 12.2% compared with pre-pandemic volumes. Domestic air cargo rose 1.9% year over year.

Aeroméxico, Viva and Volaris transported approximately 82.23 million passengers during the period, up 3.61% from a year earlier. Volaris reported transporting 30.45 million passengers in 2025, up 3.2%, while Viva carried 27.24 million passengers from January to November, an 8.6% increase. Aeroméxico transported 24.59 million passengers in 2025, down 3.0% from 25.34 million in 2024. Despite operational challenges, both Volaris and Viva surpassed Aeroméxico in passenger volumes.

Operational reliability was strained by global engine inspection programs. Volaris averaged 30.5 grounded aircraft per month over a 27-month period due to Pratt & Whitney PW1100G and PW1400G inspections, according to aviation consultant Armando Sánchez Mata. Viva averaged 21.3 grounded aircraft per month over a similar period. Both airlines relied on wet leases and capacity adjustments during peak demand.

Against this backdrop, Volaris and Viva announced an agreement to merge their holding companies in a transaction expected to close in 2026. The airlines will continue operating independently, maintaining separate brands and operating certificates, with ownership of the new holding company split evenly. “The creation of this new airline group will allow us to further stimulate air travel in Mexico, in line with the low-fare model that has driven industry growth over the last 20 years,” said Volaris CEO Enrique Beltranena.

Aeroméxico returned to the New York Stock Exchange in November after four years of restructuring, following its relisting in Mexico and marking a key step in its post-Chapter 11 capital strategy. The move came as a US appeals court temporarily blocked a Department of Transportation order requiring Aeroméxico and Delta Air Lines to unwind their joint venture pending legal review.

State-owned Mexicana de Aviación closed its second year of operations expecting to carry about 450,000 passengers in 2025, up from 350,000 in 2024, and to reach an estimated 11% share of passenger traffic at AIFA. Under its 2025–2030 Institutional Program, the airline aims to increase annual revenue to MX$3.85 billion (US$209 million) by 2030, supported by passenger services, ancillary revenues and cargo. Fleet renewal underpins the strategy, with five Embraer E195-E2 aircraft delivered from a firm order of 20.

Airports, Infrastructure and World Cup Readiness

Mexico’s three private airport groups — ASUR, GAP and OMA — handled more than 133 million passengers in 2025, a 2.26% increase from 2024. OMA led growth, reporting 28.75 million passengers, up 8.5%. ASUR handled 71.56 million passengers, up 0.3%, while GAP recorded a 2.5% increase.

AICM advanced an MX$8.5 billion (US$460 million) renovation focused on structural rehabilitation, drainage and passenger flow efficiency ahead of the 2026 World Cup. Passenger-impacting works are scheduled for completion by mid-May 2026, with overall progress reaching 35% by year-end.

AIFA closed 2025 with more than 7 million passengers, a 12% annual increase, and has handled over 17 million passengers since opening in 2022. The airport projects 9 million passengers in 2026, though traffic remains below original projections of 20 million within three years. Director Isidoro Pastor acknowledged the loss of 11 international routes in 2025 but said the impact was manageable and that efforts are underway to restore routes in 2026. Cargo operations remain concentrated at AIFA, where 49 cargo airlines have moved more than 1 million metric tons since opening.

Mexico is accelerating airport investment under President Claudia Sheinbaum, with MX$121.54 billion (US$7 billion) allocated to modernize 36 airports and a broader MX$134 billion public-private plan to upgrade 62 airports between 2025 and 2030.

Bilateral Aviation Dispute and Regulatory Risk

Mexico and the United States entered 2026 negotiations to resolve an aviation dispute triggered by the US Department of Transportation’s revocation of 13 Mexican airline routes, citing violations of the 2015 Air Transport Agreement. Infrastructure Secretary Jesús Esteva said talks are ongoing to lift the measures before the World Cup. Mexican airlines returned six AICM slots to US carriers in November as part of the negotiations, while cargo operations will remain at AIFA.

Manufacturing, Tariffs and Investment Realignment

Mexico exports about 80% of its aerospace components to the United States, making the sector highly exposed to tariffs. US duties of 25% to 50% on steel and aluminum reshaped cost structures across the supply chain. FEMIA reported aerospace growth slowed to 9% in the first half of 2025.

Despite this, Mexico remains the world’s fifth-largest aerospace FDI destination. Safran led investment activity, expanding its Safran Aero Composite facility in Queretaro and announcing a MX$2.06 billion (US$115 million) investment  across three sites, creating 238 specialized jobs. Bombardier committed US$18 million to expand component production in Queretaro, while Safran Aerosystems opened a new plant in Chihuahua following a US$7 million investment. GE Aerospace announced a MX$550 million (US$29.4 million) investment to modernize its Hermosillo and Saltillo facilities.

Airbus Outpaces Boeing as Trade Risks Loom

Airbus is estimated to have delivered about 793 commercial aircraft in 2025, supported by a year-end push that included roughly 90 December deliveries, meeting its revised target. Boeing delivered an estimated 575 to 600 aircraft as it continued recovering from an US$11.8 billion loss in 2024.

In December, Airbus warned that US tariffs on components from Mexico and Canada could raise US production costs, reaffirming long-term demand for 43,420 aircraft over the next 20 years.

Sustainability and SAF Constraints

Decarbonization emerged as a growing structural challenge. Global SAF production reached 1.5 million metric tons in 2024, less than 1% of required volumes. IATA estimates production may reach 2 million metric tonnes in 2025. ALTA warned that Latin America currently produces no SAF and has no active development projects, exposing the region to US$318 billion in potential cost increases. Mexico is expected to contribute just 3% of regional SAF production by 2050.

As the sector enters 2026, Mexico’s aerospace industry faces a convergence of strong demand, constrained capacity, trade risk and policy uncertainty, with industry leaders coordinating closely ahead of the USMCA review.