Could Mexican Aviation Be Back At Pre-Pandemic Levels Before 2022?

Before the year ends, the Mexican aviation industry could be at its pre-pandemic levels, according to data published by the Mexican Government, Cirium, and ForwardKeys. Two of the leading carriers in the country have already turned back to profit, and the trend is looking good, despite some challenges. Let’s investigate further.

Aeromexico Getty
Mexico has had a strong rebound from the COVID-19 pandemic. Photo: Getty Images.

How was Mexico’s first half of the year?

During 2021’s first semester, Mexico had total traffic of 33,368,660 passengers carried by 55 carriers, both domestically and internationally. Compared to 2019’s first half (when there were 47,415,396 passengers), that’s a 70% recovery.

We can separate Mexico’s recovery into three segments: the domestic, the US traffic, and all the other countries combined. The first two have recovered quite smoothly from the crisis, while the latter is still much behind due to travel restrictions.

Mexico’s domestic market

Mexico’s domestic recovery has been one of the great stories of the year. Fueled by Volaris and Viva Aerobus (and despite Interjet’s demise), demand is going strong in the country.

Volaris is back to its pre-pandemic traffic levels, while Viva Aerobus has grown over 11%. It’s no surprise both carriers have reported profits once again. Meanwhile, Aeromexico is around 14% below.

Despite the good numbers, 2021’s first-half traffic results are still 25% below the pre-pandemic levels. Though, to be fair, January’s levels were down 38%, while June’s levels were only down 16%. So there’s a consistent recovery.

AA Boeing 737-800
US airlines dominate the market to Mexico, led by American Airlines. Photo: Vincenzo Pace | Simple Flying

Mexico-US market

Here, US airlines heavily dominated the market, which had 74% of the transborder market share in June. Between the carriers of both countries, they carried approximately 12.5 million passengers in this first half. This puts the market at around 70% of its 2019 levels.

Nevertheless, by June, the US airlines already had a 24% increase in passengers’ number compared to the same month, two years ago.

The rest of the world

Every other airline operating flights to Mexico carried 1,238,137 passengers this first half. That’s a decrease of 78% compared to pre-pandemic levels.

What can we expect going forward?

But hey, you said that Mexico could be back at pre-pandemic levels before the year ends! I know. And it could still happen.

Mexico will definitely regain 100% of its 2019 levels in terms of capacity before the year ends, according to local trends. Domestically, both Viva and Volaris are already offering more flights and seats, according to Cirium.

Internationally, ForwardKeys expects Mexico’s arrivals to be only 5.6% below 2019 levels by the third quarter. Moreover, Cirium foresees a minimal 2.8% growth in terms of flights by December.

Volaris is leading the recovery in Mexico. Photo: Getty Images.

What challenges can Mexico expect?

There are several challenges that the Mexican airline industry can still face in 2021. The most obvious of them is the current degradation to Category 2 from the Federal Aviation Administration (FAA). Though, this downgrade is only impacting the Mexican carriers going into the US. The US airlines flying into Mexico have no restrictions other than the freezing of their codeshare agreements.

Another challenge is the recovery of other markets, for example, the transatlantic. During the last year, Mexico has benefited from the fact that Europe and the US were mostly closed to each other. Mexico attracted US travelers looking for a leisure destination, and some Europeans needed to enter the US but had to stay two weeks in Mexico before crossing the border. Now, the world is slowly opening up again, and Mexico could lose some COVID market share it gained.

The two final challenges are the pandemic and the global economy. If any of those two worsens, Mexico’s recovery could go backward.

What do you think of Mexico’s recovery so far? Let us know in the comments.



from Simple Flying https://ift.tt/3BPpzLp
via IFTTT

Comments