Mexico shouldn’t approve the legislation reform that will authorize cabotage flights to overseas carriers, in accordance with the Latin American & Caribbean Air Transport Affiliation (ALTA). If green-lighted, this legislation would solely hurt the home aviation business, not delivering the specified outcomes by the federal government.
Don’t approve the cabotage legislation
This week, ALTA launched an announcement urging Mexican legislators to not assist the cabotage reform legislation launched by the president, Mr. Andrés Manuel López Obrador. This reform would authorize non-Mexican carriers from launching home flights within the nation. Aeromexico agreed with ALTA’s assertion.
José Ricardo Botelho, ALTA’s Chief Government Officer (CEO) and Government President stated in an announcement,
“To approve cabotage would permit airways from different nations to seize home market shares with out investing within the nation, in its connectivity, or create jobs. On the similar time, it might lower the incentives to put money into nationwide airways and develop the native connectivity, primarily in less-attractive routes, which might find yourself impacting the fare ticket costs.”
In latest weeks, Aeromexico, Volaris, and Viva Aerobus urged Mexican politicians to not green-light the cabotage legal guidelines. Aeromexico requested the reform to be scrapped altogether, whereas Volaris and Viva Aerobus requested for a reciprocity clause.
Does Mexico want cabotage?
The Mexican president filed a reform legislation to authorize cabotage, pondering it might enhance the nation’s connectivity, regardless of Mexico’s civil aviation business rising at a wholesome price on this post-COVID atmosphere. Final yr, the nation led Latin America by way of passengers, having over 107 million vacationers, greater than in 2019.
ALTA stated a authorities ought to approve cabotage legal guidelines provided that the nation lacks connectivity, has a market failure, or lacks an aeronautical business, none of which apply to Mexico. Cabotage is a extremely aggressive measure that weakens the native sector and harms the passenger, the cargo business, and in consequence, the entire nation. Tax revenues, job ranges, and routes lower.
In accordance with the Worldwide Civil Aviation Group (ICAO), there are two varieties of cabotage. Consecutive cabotage is when a provider operates a service in another country however results in its origin nation. For instance, any US provider flying between Mexico Metropolis and Monterrey after which persevering with to america. Stand-alone cabotage, as an alternative, is a flight solely operated in a overseas territory.
To this point, Avianca and LATAM Airways have proven curiosity in working home flights in Mexico.
What ought to Mexico do as an alternative?
If the federal government needs to enhance the connectivity throughout Mexico, it ought to deal with different areas, ALTA stated. Prices are the principle space of concern. The inflation ranges, forex devaluation, excessive gasoline costs, and taxes have compelled airways to extend their fares throughout the area.
Trade specialists have identified that Mexico ought to as an alternative focus its efforts on recovering Class 1 from the Federal Aviation Administration (FAA). This might permit Mexican airways so as to add extra connectivity to and from america. Moreover, taxes –which typically are accountable for over 60% of a complete ticket value– must be lowered. However permitting overseas carriers to function home flights in Mexico is not going to assist obtain both.
Ought to Mexico approve cabotage permitting overseas carriers into the home market? Tell us your opinion within the feedback beneath.