Mexican airline deals will spur greater competition

Significance

The approval follows the Mexican Senate's ratification on April 29 of an agreement with the United States to allow unlimited flights between the countries, permitting the opening of new routes and greater competition.

Impacts

• Authorisation of the Aeromexico-Delta joint venture will see other Mexican carriers face pressure to establish similar partnerships.
• Pena Nieto's record of liberalising reforms suggests the government might lift the 49% foreign ownership limit on domestic carriers.
• If full foreign ownership of domestic carriers is permitted, US airlines could be able to offer flights between Mexican destinations.