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Latin America

Aeromexico Awaits U.S. and Mexico Agreement Over ‘Differences’ in Safety Rating Upgrade

Edward Russell

June 9th, 2023 at 10:28 AM EDT

An Aeromexico plane takes off in Denver

Aeromexico is eager to add new U.S. flights and destinations and resume its close partnership with Delta Air Lines, all of which were key elements of its Chapter 11 restructuring that concluded last year. But it can do none of those things until the U.S. and Mexican governments come to an agreement over “differences” in returning Mexico’s safety rating to Category 1 status.

“It’s an opportunity cost of not being able to fly as much as we’d like,” Aeromexico CEO Andres Conesa said of the situation on the sidelines of the IATA Annual General Meeting in Istanbul this week.

But while Conesa was optimistic that the U.S. would return Mexico’s safety rating to Category 1 in “a few weeks,” new comments from Mexican President Andres Manuel Lopez Obrador suggest the move could still be a little ways off. The upgrade, which is focused on Mexico’s aviation regulator and not the safety of the country’s airlines, is necessary for Mexican airlines to add flights and expand to the country’s northern neighbor.

“There are differences,” Lopez Obrador said Thursday after a visit with U.S. Transportation Secretary Pete Buttigieg. “But these are important matters, and we must come to an agreement.”

And Reuters reported that the U.S. had no specific timetable for the upgrade, which some had speculated could coincide with Buttigieg’s trip to Mexico.

Aeromexico has added 19 Boeing 737-8s and -9s to its fleet since the U.S. downgraded Mexico to Category 2 in May 2021, FlightRadar24 data show. None of those aircraft can fly to American destinations until the safety rating returns to Category 1. In addition, Delta had to drop its code from all Aeromexico flights, which significantly limited the benefits of the carriers’ transborder joint venture.

“We have a very comprehensive plan to add new destinations, and also add additional frequencies to the ones we serve that today we cannot do because we are in Cat. 2,” Conesa said of Aeromexico’s plans once the upgrade occurs.

Conesa said the airline had not “quantified the impact” of its inability to codeshare with Delta, but said that it “definitely has an impact” on Aeromexico’s bottom line.

The safety rating downgrade could not have come at a worse time for Mexican airlines. Air travel between the U.S. and Mexico has surged since the pandemic as many American travelers took closer-to-home international holidays. The Cancun airport was one of the pandemic’s all-star airports, and has never been busier. But U.S. airlines have been the biggest beneficiaries from the surge in American visitors as they could add flights without restriction unlike their Mexican counterparts.

Airlines will operate 48 percent more seats between the U.S. and Cancun this month than in 2019, according to Cirium Diio schedules. But that is almost entirely on U.S. carriers; Mexican airline seats in the market are down 83 percent.

Volaris, Mexico’s largest airline, plans to immediately shift four aircraft to U.S. routes from Mexican ones once the upgrade occurs, its Executive Vice President of Airline Commercial and Operations Holger Blankenstein said in April. It will use those planes to add new routes and frequencies. Volaris hopes to begin the expansion in the fourth quarter.

And VivaAerobus, the country’s second largest, hopes that the upgrade will allow it to secure final approval of its pending transborder joint venture with Allegiant Air. The pact, which was approved by Mexican authorities in October 2022, has been in limbo on the U.S. side since American authorities cannot approve it until Category 1 is restored.

Mexico has had to make a number of changes at its civil aviation regulator, as well as pass new laws, to meet U.S. aviation safety rules. The latest review of the Mexican regulator by the Federal Aviation Administration occurred during the final week of May.

Edward Russell

June 9th, 2023 at 10:28 AM EDT

Tags: Latin America

Photo credit: An Aeromexico plane takes off in Denver Denver International Airport

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