makes sense to me, of course there is going to be pushback from those with skin in the game, preferring their non-competitive setups they have worked on for decades.
Courtesy ACD in Mexico
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Mexico leader: open domestic flights to foreign airlines
MEXICO CITY (AP) — Mexican President Andrés Manuel López Obrador said Tuesday he wants to allow foreign airlines to operate domestic service between Mexican cities, to drive down prices.
Mexican law currently prohibits foreign carriers from operating purely domestic flights. For example, a U.S. airline can currently fly from New York to Cancun, but not Cancun to Mexico City. Known as “cabotage,” the president wants to allow the practice to lower ticket prices.
“The other thing is to open up aviation,” López Obrador. “Let's open it up to competition. That's democracy.”
“Let foreign airlines come in, from Europe and the United States, so that they can operate flights inside the country,” he said.
The proposal would fly in the face of López Obrador’s push to make Mexico self-sufficient. But the president allows wants to lower domestic airfares, and bring service to smaller cities that lack flights.
The president is also eager to get more airlines to fly into the new airport he ordered built at a former air force base just north of Mexico City; that terminal is currently under-used.
Simple Flying (Daniel Martinez Garbuno)
The Mexican airline industry has requested the government not to go any further with the plans to authorize cabotage flights from international operators at the Felipe Ángeles International Airport (NLU). In a statement, the National Chamber of Air Transportation (Canaero) urged the authorities to address other topics crucial to the country's development, such as the recovery of Category 1 status with the Federal Aviation Administration (FAA).
Cabotage flights are a big no-no
In the last few weeks, there has been a lot of information regarding the possibility of Mexico allowing cabotage flights from Mexico City’s newest airport, NLU. The objective of enabling foreign carriers to operate domestic flights would be to drive prices down.
There are two types of cabotage, consecutive and ‘stand-alone.’ These are also known as the eighth and ninth freedoms of the air, respectively.
Per the International Civil Aviation Organization (ICAO), consecutive cabotage is the right to transport traffic between two points in the territory of a granting State on a service that originates or terminates in the home country of the foreign carrier. It would be like if Turkish Airlines, on its route Mexico City-Istanbul via Cancun, was allowed to carry passengers between Mexico City and Cancun.
‘Stand-alone’ cabotage is the right to perform a passenger service entirely within the territory of the granting state. It would be like if, let’s say, American Airlines operated flights between Mexico City and Cancun.
The Mexican airline industry wants to avoid cabotage being considered. Canaero said that opening the air freedoms to incentivize the operation of the Felipe Ángeles Airport is not an appropriate mechanism to improve the air connectivity of Mexico City, and it “endangers the position of the national airline industry.” Canaero represents airlines such as Aeromexico and Aeromar.
Last month, Mexican President Andrés Manuel López Obrador said he would be in favor of allowing foreign airlines to operate domestic services between Mexican cities. He said that allowing cabotage flights is democracy. “Let foreign airlines come in from Europe and the United States so that they can operate flights inside the country,” he added.
A week later, the Mexican army administrator of NLU said the hub would be open for cabotage flights. Nonetheless, before cabotage flights are allowed in the country, Mexico needs to pass a change to the law, which currently strictly forbids foreign operators to fly within the country.
The priority: recover Category 1 status
Canaero added that the Mexican industry is going through a difficult time and that the government should focus on something other than allowing international players to enter the market. Instead, the government should have as its main priority to recover the Category 1 status with the FAA. Mexico was downgraded to Category 2 status in May 2021, impacting the ability of local airlines to launch new flights to the United States.
“The recovery of Category 1 status should be the main priority of government and industry since this important achievement will be a catalyst for air connectivity with our main international market, where NLU could play a fundamental role,” said Canaero. It is expected Mexico could regain Category 1 status until 2023’s second quarter.
ACD: So, that's that, right? Maybe, maybe not. I'd bet on the latter.
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