Mexico’s airlines start 2018 with solid demand prospects and a healthy level of uncertainty

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Stability and uncertainty are the two divergent themes emerging in Mexico’s aviation market at the beginning of 2018. The country’s airlines continue to chart solid passenger growth in both the domestic and international markets, but Mexico’s operators are facing pricing pressure in the domestic market, and on some US transborder routes.

US President Donald Trump continues to push for the erection of a border wall, and in political posturing has pegged the fate of deferred action for childhood arrivals programme (DACA) to funding for the wall’s construction.

Pressure in the US transborder market during 2017 was driven by political uncertainty and increased capacity, due to a more liberal air service agreement between the US and Mexico. Near the end of 2017, Mexico’s largest airline, Grupo Aeromexico, cited some capacity rationalisation in the US transborder market, which could ease some of the challenges hovering over those routes.

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