US low-cost airlines win over Mexico airfare downgrade

US low-cost airlines are the winners of the downgrade to Category 2 of air safety in Mexico. Between May 2021 and the same month this year, Frontier, Spirit, JetBlue and Alaska Airlines were the companies that most increased passenger traffic from Mexican soil to the United States, according to figures from the consulting firm Cirium.

During those 12 months, Frontier increased passenger traffic by 67%; Spirit by 50%; JetBlue by 28%, and Alaska Airlines by 14%. In contrast, Mexican low-cost airlines decreased the number of passengers they transport to the United States. Viva Aerobus reduced the number of people it transported from the country to the United States by 24% during that period, while Volaris decreased it by 9%.

In May 2021, the Federal Aviation Administration (FAA) downgraded Mexico to Category 2 for air safety, because the Federal Civil Aviation Agency (AFAC) did not meet international standards to oversee commercial airlines in the country. As a result, Mexican airlines cannot increase frequencies to the United States, open new routes or introduce larger aircraft than they were authorized to.

The case of Aeroméxico stands out, as it managed to increase the number of passengers between both countries by 57% in that period, according to Cirium.

Aeromexico explained that it already had authorized routes to the United States before the downgrade, which it was able to reactivate and, thanks to its alliance with Delta, it managed to continue growing, in addition to the recovery of international travel.

"Although we were not allowed to open more routes, we were able to increase frequencies in the destinations where we already operated before the downgrade," the airline told EL UNIVERSAL.

“In addition, we allocate our fleet according to the capacity demanded to achieve better coverage, as we have aircraft with from 99 to 276 seats,” he added.

According to analysts, US airlines were not expected to grow so much because they were expected to recover from Category 1 within six months, but that did not happen.

The Center for Tourism Research and Competitiveness of the Universidad Anáhuac estimates that in the last 11 months, Mexican airlines have lost 9 billion pesos due to the 200 million seats in the US market that they have neglected due to the downgrade to Category 2.3.

“The downgrade hits airlines that do not have a robust codeshare, such as Aeromexico [with Delta] very hard,” explained Juan Carlos Machorro, a partner specializing in airport and aeronautical law at Santamarina y Steta.

“Viva and Volaris cannot launch new routes, increase frequencies and cannot use new equipment on routes they were already operating,” he said.

By number of passengers transported, American Airlines and United Airlines are the airlines that transport the most passengers between Mexico and the United States.

American increased the number of passengers transported by 5% in the first year of the downgrade and United moves practically the same number as in May 2021.

Jonathan Félix, director of Analysis at PCR Verum, said that low-cost airlines were the most favored, since most passengers between the two countries are people visiting relatives or friends, and they choose the cheapest fare. In addition, if Mexican airlines do not have the appropriate route or schedule, they choose an American one.

Rogelio Rodríguez, an aviation law specialist, said that the growth of US low-cost airlines is due to the Bilateral Air Services Agreement with the United States, signed in 2017, which eliminated the restriction that only two airlines from each country could operate the same route.

Machorro predicted that Mexican airlines will continue to lose ground to American airlines, since the Mexican government is not investing resources.