ALTA presents Mexico Aviation Insight

The figures for Mexico’s air transport market are impressive: 118.1 million passengers were carried in 2023, 10,6% up on 2022, the highest figure in its history. Domestic passengers made up 54% of the traffic, making Mexico the second largest domestic market in Latin America, following Brazil.

This is a positive trajectory. “Over the last 15 years, both the domestic and international markets have grown steadily at a 5.7% and 5.1% average, respectively, figures that are above the world average,” highlights ALTA Mexico Aviation Insight, a compendium of statistics on the air transport in the country developed by the Latin American and Caribbean Air Transport Association (ALTA).

Meanwhile, José Ricardo Botelho, ALTA’s Executive Director & CEO, deepens that “the Mexican air market still has an enormous potential: its per capita trip indicator stands at 0.87 trips per capita, substantially higher than the regional average of 0.6 trips per capita, but almost three times lower than its neighboring United States (2.53 trips per capita). This is an industry that has created 72 new post-pandemic routes to bring Mexicans even closer and can still grow much more.”

Botelho presented the report ranking several key aviation demand and capacity indicators, such as the main airports and city pairs in the country in terms of volume and growth. The statistics are based on data provided by Amadeus Travel Intelligence Platform, which includes airline traffic information and schedule databases feeding global distribution systems and travel portals throughout the world, as well as authorities and operators in the country.

This report shows that, during 2023, the aviation industry in Mexico had a 10.6% total growth in passenger traffic, 7.8% in seat capacity and 4.3% in flights operated, “however, on average, people still travel less than once a year, which tells us that there is still a lot of work to be done,” contrasts ALTA’s CEO.

Although the figures are positive, there are aspects that work against the sustained growth of the industry in the country, such as the high cost of taxes, the lack of investment in airports, among other aspects that hinder the performance of a key industry for international tourism, an industry contributing 14.9% of the GDP and 12.2% of the jobs in Mexico.

One of the aspects impacting the sustained growth of aviation in Mexico is the high taxes imposed on the industry. Mexico pays an average of 104 USD in international taxes and fees, plus 4% in base tariff taxes, making it the third country in the region where passengers pay the most in total taxes and fees, only after Argentina and Jamaica. In 2024, AICM’s Airport Use Tariff increased 3.2%, making it one of the highest in the world. This tariff can represent up to 60% of the cost of an air ticket, depending on the business model of each airline.

Among the challenges mentioned is the infrastructure in Mexico, which is considered insufficient to meet the demand for flights, resulting in crowded airports. This lack of adequate infrastructure limits growth potential. In addition, there is a level of legal uncertainty surrounding Mexico’s air market, impacting investment and long-term planning.

“In 2023, 42.2 million tourists visited Mexico, contributing 30.809 billion dollars to the Mexican economy. Out of the total tourists, 20.32 million arrived by air and contributed 90% of the total foreign exchange received by the country through tourism, these data clearly show the importance of air transport for generating economic benefits in Mexico”, ALTA’s CEO highlights.

Aviation, explains Botelho, is a powerful economic catalyst; it is an industry generating social and material benefits resulting in wellbeing for an entire country and even for the region, but it is also a sector requiring legal security, predictability for investments, airport infrastructure development, optimization of operating costs; these aspects are key for Mexican aviation to achieve the necessary impetus for developing its maximum potential.

The Mexican sky in figures:

• The international market To/From Mexico had a total capacity of 68.7 million offered seats and 54.9 million passengers carried in 2023
• Cancun – Dallas Fort Worth was the busiest city pair in Mexico’s international market with 1.1 million passengers and 1.4 million active seats in 2023. The route had a load factor of 81%
• Cancun International Airport was the largest in Mexico’s international market with 24.9 million available seats and 19.8 million passengers in 2023.

Domestic Market

• Volaris led the domestic market in terms of passengers carried in 2023, with 30.2 million passengers, a market share of 26%
• Aeromexico carried 24.9 million passengers representing 21% of the market followed by VivaAerobus with 19% and 22.8 million passengers
• Mexico City (MEX) – Cancun was the most in-demand route in the domestic market (measured in traffic by leg) with 4.5 million passengers and 5 million seats
• As measured in O&D traffic, Mexico City (MEX) – Cancun was the most important route in the domestic market with 3.7 million passengers traveling between the two cities during 2023
• Monterrey Airport was the fastest growing domestic airport in Mexico during 2023, with over 2 million additional seats and 1.9 million more passengers compared to 2022.

VIDEO ON THE IMPACT OF AVIATION ON THE MEXICAN ECONOMY AVAILABLE HERE

AVIATION INSIGHT AVAILABLE HERE