Diana Olivares: Mexico’s airlines lost over one billion dollars due to safety downgrade

The downgrading of Mexico’s air safety rating by the United States Federal Aviation Administration (FAA), imposed two years ago, has cost the country’s airlines over one billion dollars, according to industry sources quoted by Reuters.

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The impact on Mexico’s airlines

«It was a huge loss», said Diana Olivares, President of the National Chamber of Aerotransports (Canaero) and Managing Director for Mexico at LATAM Airlines, referring to the measure, established in May 2021 after claims that International Civil Aviation Organisation (ICAO) safety standards were not met.

While the downgrade allowed Mexican airlines to continue existing services to and from the United States, it prohibited the establishment of new routes or the expansion of frequencies. For their part, American carriers cannot market tickets under codeshare agreements for flights operated by Mexican companies.

However, Olivares said the measure has benefited foreign operators and hurt Mexican ones: «In the meantime, foreign carriers have been free to boost flights, expanding their market share at the expense of Mexico’s domestic airlines».

See also: Mexican government seeks to regain safety status

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Optimism over possible Category 1 recovery

In early June, the Federal Aviation Administration concluded a new audit that Mexican authorities said was the «last» in a series of reviews that should lead to the recovery of Category 1 status. However, the American regulator has not yet made its decision public.

According to statements by Olivares quoted by Reuters, Canaero expects the confirmation to be made official by the end of July. Over the past two years, Mexico has worked to regain the safety status, although there are still some sticking points.

Reuters said that Mexican authorities reported concerns about procedures for publishing and transmitting information, as well as medical examinations for industry workers. «The medical issue was up for review», Olivares said.

While industry professionals denounce the delay in rigorous assessment procedures across the country, a week after the completion of the audit, Mexico’s Federal Civil Aviation Agency (AFAC) said it would temporarily accept expired medical exams.

See also: Aeroméxico CEO Anticipates Return to FAA Category 1 Status