COVID 19: Mexico's airlines could face major changes

The health emergency that Mexico declared in response to the COVID-19 virus is due to end on 30-Apr-2020, but similarly to its effect in aviation markets worldwide, the pandemic will have far-reaching effects on Mexico once the crisis is over. The next step would be to extend the restrictions associated with the health emergency, and it is unknown whether that will happen at this point, but Mexico's COVID-19 cases have grown substantially during the past weeks.

In the meantime, Mexico's airlines are using strategies adopted by airlines worldwide to cope with the crisis: slashing capacity and parking aircraft. And as is the case in other markets, some airlines in Mexico are better equipped to weather the crisis than others.

One big unknown for the country's aviation market is how the government will now approach Mexico City's airport infrastructure. The current administration of Andrés Manuel López Obrador (AMLO) opted to end construction of a new airport and was working on a plan to create three airports to serve the city, which entailed transforming part of a military base to handle commercial operations.

But with demand not likely to reach pre-crisis levels for a couple of years, those plans could be frozen for the foreseeable future.