The US Federal Aviation Administration (FAA) upgraded Mexico's aviation safety rating to category 1, allowing Mexican airlines to expand new routes to the US.
Mexican airlines will be able to recover the market share they lost over the past 28 months when they were unable to launch new routes to the US because of the category 2 status, which prohibited US-based carriers from opening new routes.
In the first half of the year, Mexican airlines Volaris, Aeromexico and Viva Aerobus held only around 27pc of the market share between Mexico and the US, about 5 percentage points below the 32pc market share they held before the downgrade, according to Argus calculations based on air traffic data.
Mexico's return to category 1 status came "after more than two years of close work" between the FAA and Mexico's civil aviation authority (AFAC), according to the FAA.
The FAA downgraded Mexico's aviation safety status to category 2 in May 2021 after finding that AFAC fell short in one or more critical areas, such as technical expertise, inspection procedures or trained personnel.
AIFA airport to take advantage
The recovery of category 1 is expected to boost traffic of passengers and consumption of jet fuel in all Mexican airports, but mainly at the Felipe Angeles international airport (AIFA), a flagship project of President Andres Manuel Lopez Obrador's administration.
Mexico's transportation ministry announced last week that flights at Mexico City international airport (AICM) will be reduced from 52 to 43 operations per hour next year, potentially growing traffic at AIFA.
Although the details of the operation reduction at AICM have not been announced, nor whether it will affect international flights, the AIFA will benefit from Mexico's return to category 1, according to market sources, as Mexican carriers will now be able to add routes to the US from the new airport.
The 17pc decrease of operations at AICM could translate into a reduced demand for jet fuel at the airport, switching such demand to AIFA.
Mexico's newest airport has a jet fuel storage capacity of 21mn l (130,000 bl), the second largest behind AICM's 24mn l storage capacity.
AIFA's storage capacity is only 9pc full, according to data from Airports and Auxiliary Services (ASA).
The AIFA will also benefit for an increased demand for jet fuel at the airport, as Mexico's energy regulator CRE granted a jet fuel commercialization permit to the administration of the AIFA in June, enabling the airport to directly supply jet fuel to airlines operating at the airport.
