Santamarina Steta

US Low-Cost Airlines Win for Air Degradation in Mexico

US low-cost airlines are the winners of the downgrading to Category 2 of air safety in Mexico. Between May 2021 and the same month of this year, Frontier, Spirit, JetBlue, and Alaska Airlines were the companies that most increased passenger traffic from Mexican soil to the United States, show figures from the consulting firm Cirium.

During those 12 months, Frontier increased passenger traffic by 67%; Spirit by 50%; JetBlue by 28%, and Alaska Airlines increased it by 14%. In contrast, low-cost Mexican airlines decreased the number of passengers transported to the United States. Viva Aerobus reduced the number of people transferred from the country to the United States by 24%, while Volaris dropped 9%.

In May 2021, the Federal Aviation Administration (FAA) downgraded Mexico to Category 2 in aviation security because the Federal Civil Aviation Agency (AFAC) did not meet international standards for supervising business airlines in the country. As a result, Mexican airlines cannot increase frequencies to the United States, open new routes, or introduce larger aircraft than they had authorized.

The case of Aeroméxico stands out, which managed to increase the number of passengers between the two countries by 57% in that period, according to Cirium.

Aeroméxico explained that it already had authorized routes to the United States before the downgrade, which it was able to reactivate and, thanks to its alliance with Delta, managed to continue growing, coupled with the recovery of international travel.

"Although it was not allowed to open more routes, it was possible to increase frequencies in the destinations where we already operated before the downgrade," the airline told EL UNIVERSAL.

"In addition, we assign our fleet according to the demanded capacity to achieve better coverage since we have planes that have from 99 to 276 seats," he added.

According to analysts, the US airlines were not expected to grow so much because Category 1 was anticipated to be restored within six months, but it did not happen.

The Center for Research and Tourism Competitiveness of the Anahuac University estimates that, in the last 11 months, Mexican airlines have lost 9.2 billion pesos for the 2.3 million seats in the US market that they have neglected as a result of being downgraded to Category 2.

“The downgrade hits airlines that do not have a robust shared code very hard, as Aeroméxico has [with Delta],” explained Juan Carlos Machorro, an expert partner in the airport and aeronautical law at Santamarina y Steta.

“Viva and Volaris cannot launch new routes, increase frequencies, and cannot use new equipment on the routes that were already operating,” he said.

By number of passengers transported, American Airlines and United Airlines are the ones that transport the most between Mexico and the United States.

American increased the number of passengers carried by 5% in the first year of the downgrade, and United moves practically the same number as in May 2021.

Jonathan Félix, director of PCR Verum Analysis, said that low-cost airlines were the most favored since the prevalence of passengers between the two countries are people visiting family or friends, and choose the cheapest rate. Also, if the Mexican airlines do not have the proper route or schedule, they choose an American one.

Rogelio Rodríguez, a specialist in aeronautical law, pointed out that the growth of US low-cost airlines is due to the Bilateral Air Services Agreement with the United States, signed in 2017, which eliminated the lock that only two airlines from each country operated the same route.

Machorro anticipated that Mexican airlines will continue to lose ground to US airlines since the Mexican government is not investing resources.

Source: El Universal

Juan Carlos Machorro