- Passenger numbers:
- Domestic: 2.4 million, +5.9% year-on-year;
- International: 2.9 million, +10.9%;
Mexican domestic passenger numbers up 6% Mar-2013, int'l pax up 11%
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Synergy spreads its wings to Argentina and Mexico to broaden its strategic Latin markets
After losing the competition to acquire a majority stake in TAP Portugal during 2015, the South American conglomerate Synergy Group has turned its attention to Argentina and Mexico – two of Latin America’s most promising markets. Mexico’s domestic passenger growth continues at a steady rate, and a more liberalised era ushered in by Argentina’s new government is opening up the country’s domestic and international markets to new competitors.
Synergy is taking a sizeable stake in the Mexican regional airline Aeromar, a small player in the country’s aviation market compared with the fast-growing low cost airlines that have grown rapidly during the last few years. Synergy decided to outline plans for its stake in Aeromar just as the US presidential election casts a cloud over the Mexican market due to president-elect Trump’s protectionist rhetoric during his campaign.
Synergy’s moves in Argentina and Mexico are occurring as Avianca Holdings searches for a strategic investor and foreign entities line up to invest in Latin American airlines. For now, Synergy remains Avianca’s largest shareholder.
Mexican airlines: growing US protectionism creates a cloud of uncertainty over 2017
Mexican Airlines are starting 2017 under a cloud of uncertainty driven by the country’s slower economic growth and the increasing rhetoric by president-elect Donald Trump against US companies planning to sustain or expand their operations in that country. The US auto manufacturer Ford recently back-pedalled on plans to construct a new plant in Mexico, and GM has also drawn ire from the president-elect over its Mexican operations.
The threat of dissolving trade pacts, and Mr Trump’s general anti-immigration stance, sent the MXP plummeting after the US Presidential election, and the latest round of threats of taxation on automobiles manufactured outside the United States has put additional pressure on Mexico’s currency, which has been weaker during the last year and that has created pressure for Mexican airlines. However, for now, Mexico’s air passengers continue to grow at a steady rate. The country’s domestic airlines charted approximately 12% growth in passengers from Jan-2016 to Nov-2016, and international passengers among those airlines for the same time period strengthened by 11%.
Predicting whether those levels of growth will continue in 2017 is a challenge, given the level of uncertainty the US election has created for Mexico, along with internal strife the country is dealing with – including growing inflation and discontent over rising fuel prices.