Mexico airline sector faces various challenges

Significance

The closure comes against a backdrop of challenges for the air transport sector, including the potential opening of domestic routes to international airlines and government pressure on carriers to increase their use of Mexico City’s Felipe Angeles International Airport (AIFA).

Impacts

• Despite the negative circumstances, none of Mexico’s three main domestic airlines looks at risk of bankruptcy.
• New airports will be managed by the army, alongside the new airline.
• No changes to the Foreign Investment Law to allow foreign airlines to own controlling stakes in Mexican carriers are likely.