The cancellation of NAIM will come at a price for the new federal government. Most of the resources used to finance the airport came from private investors through the MexCat fund and the new government has offered to repurchase US$1.8 billion worth of bonds at an initial price ranging between US$0.90 and par. This initial offer was turned down by bondholders. The Ministry of Treasury and Public Finance improved the offer but as of Friday, the government had been turned down three times.
The cancellation is also resonating globally. IATA has pointed out that international passengers might avoid making flight connections in Mexico as a consequence. Alexandre de Juniac, President of the association, also said Aeroméxico and Volaris will be the most affected airlines since they are the country’s largest carriers. At the same time, Pablo Azcárraga, President of Mexico’s National Tourism Business Council (CNET), said the cancellation of the new airport, coupled with the disappearance of CPTM, will eat into Mexico’s tourism dynamism.
In November, Mexican airlines reported growth in passenger traffic. Viva Aerobus transported 24 percent more passengers in November compared to the same month of 2017 and Interjet increased its international passenger traffic by 35.8 percent in the first 11 months of 2018.
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Repurchase of Airport Bonds Remains Grounded
After the first offer to repurchase NAIM bonds was turned down by holders, Mexico’s Ministry of the Treasury and Public Credit improved the offer on Tuesday.
As of Friday, NAIM bondholders turned down the updated offer for the third time.
Suspension of NAIM construction works in Texcoco would entail a technical default. Investors would be in a position to demand the immediate payment of their investments.
The NAIM Affair
Volaris downplayed the impact of the cancellation of NAIM saying that its near-term growth is not tied to an expansion in the Mexico City area.
Without NAIM, passengers will avoid making flight connections in Mexico, according to IATA. Aviation hubs in Panama, Houston and Dallas could take advantage of Mexico’s airport infrastructure limitations.
According to Pablo Azcárraga, the cancellation of NAIM in Texcoco and the disappearance of CPTM will brake the dynamism of Mexico’s tourism sector.
Passenger Traffic, Mergers and Plane Parts
Interjet transported over 3.33 million international passengers between January and November 2018, which entailed 35.8 percent growth in that segment.
Viva Aerobus increased its passenger traffic by 24 percent in November compared to the same month in 2017. It transported 899,877 passengers.
With 70 suppliers accounting for US$1 billion worth of aerospace components, Queretaro is the largest Boeing supplier among Mexican states, after Chihuahua.
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