“Please remain seated as we are going through more turbulent areas”.
The United States Federal Aviation Authority (FAA) has reported that the Mexican government no longer meets the minimum security standards established by the International Civil Aviation Organization (ICAO). As a consequence, the administration has downgraded the nation’s rating from Category 1 to Category 2.
After several rumours and uncertainty, on the 25th May the FAA confirmed this major decision through a statement. But what does Category 1 and 2 mean?
In layman’s terms, any airlines based in Category 1 nations are allowed to operate as well as carry out commercial exercises such as codeshares or joint ventures with US airlines. Meanwhile, for those airlines from countries in Category 2, operations and commercial agreements are limited to those that already existed prior to the downgrade. Currently, the list of countries that are in Category 2 are Venezuela, Bangladesh, Curaçao, Ghana, Malaysia, Pakistan, and Thailand.
In order to be downgraded by the FAA, the Mexican authority was shown to have deficiencies in some of the following areas:
- The country lacks the laws or regulations necessary to support the certification and supervision of airlines in accordance with minimum international standards.
- The country lacks the laws or regulations necessary to support the certification and supervision of airlines in accordance with minimum international standards.
- The country lacks the laws or regulations necessary to support the certification and supervision of airlines in accordance with minimum international standards.
- The country lacks the laws or regulations necessary to support the certification and supervision of airlines in accordance with minimum international standards.
- The country lacks the laws or regulations necessary to support the certification and supervision of airlines in accordance with minimum international standards.
Source FAA (2021)
At present, the specific reasons for the downgrade have not yet been made public due to the confidentiality policy the Mexican authority holds. The FAA’s decision raises two fundamental questions: How will it affect Mexican carriers? And what is the position of the Mexican government?
Although the turbulence of the COVID-19 storm is still very much present, little by little aviation has shown small signs of recovery. It seems that for Mexican carriers the crew must double-check that all passengers have their seat belts on, as the FAA’s decision could well cause severe turbulence between the two markets. As stated by the National Chamber of Air Transport (CANAERO in Spanish), Mexican carriers’ expansion plans are closely linked to the North American market. Recently Volaris and VivaAerbus (low-cost carriers) announced new routes while the Mexican giant AeroMexico increased frequencies to the US.
This Category downgrade stifles expansion and could represent financial losses and a slowdown in the recovery process of Mexican aviation, a scenario which must be avoided given the current market climate. Although the current operations of Mexican airlines will not be affected, the degradation could cause an inability to participate and grow further into North America – a very influential and important market, but above all very attractive at the moment due to the strong recovery that is taking place after the successful vaccination campaign in the US.
This is not an unknown situation, as in 2010 Mexico was previously downgraded much in the same way. However, in a period of 4 months (considered a record time), and after an investment of more than 2 million USD, the Mexican authority at the time was able to quickly return to a Category 1 safety rating. But what is the difference between then and now? Will the current government be able to approach the situation with a similar boldness?
The facts are that after the announcement of the degradation, the Secretary of Communication and Transportation of Mexico committed to taking the pertinent measures to return to the top category. Likewise, AeroMexico also came forward – recognizing that they will not be able to open new routes, and offering their support and expertise to the authority so that together they can tackle this new challenge. However, beyond these commitments which appear positive and real, it is the actions and comments of the Mexican President that make the markets tremble and put the authorities in contradiction.
Recently the president expressed:
“The national airlines would not be affected because they are more dedicated to the internal (regional) market, it is not a sensitive issue, this is only to benefit US airlines, it is not a matter that I consider serious”
Andrés Manuel Lopéz Obrador- Mexican President.
After these statements, the very little sensitivity, knowledge, and support that the current government gives to the airline industry is evident. Mexico has sent negative signals ever since the cancellation of the New International Airport in Mexico City. Along with these statements from the president, the deficiencies and critical analysis by the current administration are clear. Unfortunately, the situation is not as the president states. Quite on the contrary. The North American market is of the utmost importance for Mexico. In fact, for the USA, Mexico is currently their most important market and vice-versa. For example, according to the USA Bureau of Transportation Statistics (BTS) approximately 1,931,000 passengers travelled between the two countries during March 2021 alone.
This decision will not only damage the chances for Mexican carriers to increase frequencies, but could also affect other externalities such as economic remittances, trade, and tourism. If the North American market was not so important, how can Delta and AeroMexico justify their joint venture? Or why have Volaris opened a new hub in Chicago? These comments only magnify the little experience the Mexican government has of the aviation industry. Above all, it is regrettable that the president does not consider this situation a “serious matter”. These statements only serve to question the validity of the actions the Mexican authority will take.
Although the future of US-Mexico air travel remains uncertain, we can be slightly optimistic since both CANAERO as well as some Mexican airlines, such as AeroMexico, are following the same path in working together to advise the Mexican government – with the common objective of returning to the first division of the FAA. For now, the status of the arrival of the flight “RECOVERY” remains “Delayed.”
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