This is an excerpt of the 2017/18 edition of Mexico Aviation & Aerospace Review. If you want to get all the information or participate with relevant insights regarding the Mexican aerospace industry, request contact with Mexico Aviation & Aerospace Review’s team here.
Exclusive interview with Cuitláhuac Gutiérrez, Country Manager of International Air Transport Association (IATA) Mexico.
Q: What is your view of the aviation industry in Mexico and the main changes in the market?
A: In Mexico, the aviation industry contributes positively to the national economy, generating more than 1 million direct and indirect jobs and contributing 3 percent to the national GDP. This represents more than US$35 billion annually and reflects the importance of aviation for Mexico.
The Mexican aviation industry has entered a consolidation stage. The variety of airline business models have found their market niches, maximizing the transport of passengers in the country. Airline offering includes legacy carriers, hybrid, low-cost and ultra-low cost, in addition to regional aviation. An important element of the positive results is the solid commitment driving the development of new routes and flows to maximize connectivity.
Q: What challenges does the aviation sector face in Mexico?
A: The sector has an enormous opportunity for growth and consolidation; the biggest challenges will come from over-onerous taxation, airport infrastructure, operating costs and a stable regulatory framework. Air transport needs smart regulation, efficient operations and technology and most importantly, the adoption of best international practices to maximize the benefits of the sector.
With hundreds of major airlines operating all over the world, airlines are used to competing among themselves by offering excellent services to a wide range of customers at attractive prices. The biggest challenge airlines face in Mexico is more related to the country’s aviation policies. Recently, we have seen a flurry of perhaps well-intentioned, yet misguided, legislation that is out of sync with global best practices and that is damaging air transport in Mexico.
Legislation mandating free checked bags, non-sequential coupon use and free ticket cancellations up to 24-hours before the flight prevent airlines from maintaining competitive prices or even being able to service some routes. Close consultation between the authorities, airlines and other key stakeholders is needed to ensure aviation policy is aligned with global best practices and does not damage Mexico’s budding, yet fragile, air transport industry.
Q: What are the most important trends you are seeing in the aviation market?
A: Airlines have made major efforts to make flying more affordable. Thus, more passengers are traveling today than 10 or 20 years ago. The average roundtrip ticket price has fallen 64 percent since 1996 and this has democratized air travel. In Latin America, air travel is accessible for more people than ever and this is one of the reasons why we expect the number of passengers to double between 2015 and 2035. It is up to governments to ensure airports and other vital pieces of air infrastructure are in place so airlines can serve this demand.
Another trend that has transformed the industry and the passenger experience is technology. More and more aspects of the passenger journey are controlled by the passenger, from check-in to baggage tracking, in addition to other services from a smartphone. We expect technology to facilitate further improvements for passengers and usher in changes at airports as well that could speed up security processes and allow boarding with automated access gates, for example.