U.S. downgrades Mexico air Safety Rating, Offers Assistance

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Mexico’s aviation safety rating was downgraded by the United States on Tuesday, an action that bars Mexican carriers from adding new flights and limits their ability to market to one another.

Despite the objections of the Mexican government, the U.S. as a result of the downgrade, the Federal Aviation Administration announced it would increase scrutiny of Mexican airline flights to the United States.

The U.S. air regulator added it is “fully committed to helping the Mexican aviation authority improve its safety oversight system to a level that meets” international standards. The agency also said it is “ready to provide expertise and resources” to resolve issues raised in the safety assessment process.

The FAA downgraded Mexico – the most common international destination for U.S. air travellers last month – from a level called Category 1, which signifies compliance with international standards, to Category 2, the lowest level.

Mexico’s government said on Tuesday it is determined to recover a Category 1 air safety rating quickly.

“I think it will be a relatively quick and easy process,” deputy transport minister Carlos Moran told Reuters. “I hope it is less than three months.”

The Category 2 rating, according to the FAA, means Mexico lacks “necessary requirements to oversee the country’s air carriers in accordance with minimum international safety standards, or the civil aviation authority is lacking in one or more areas such as technical expertise, trained personnel, record-keeping, inspection procedures or the resolution of safety concerns.”

Shares in Mexican airline Aeromexico (AEROMEX.MX) fell nearly 10% on Tuesday afternoon after the downgrade. Shares of Mexican airport operators ASUR, GAP (GAPB.MX) and OMA (OMAB.MX) also declined.

Mexico’s air transportation industry group Canaero said the downgrade will “severely affect” the sector’s recovery from the effects of the COVID-19 pandemic and trade with the United States but it does not expect the action to impact existing operations of Mexican airlines.

Moran, in the interview with Reporters, ruled out government support for struggling airlines.

A similar FAA downgrade of Mexico in 2010 over suspected shortcomings within its civil aviation authority lasted about four months. Only a few countries are currently rated Category 2 by the FAA, including Bangladesh, Pakistan, Thailand and Malaysia.

Mexican President Andres Manuel Lopez Obrador on Monday had urged U.S. authorities not to downgrade Mexico, arguing his country was complying with all relevant norms. Mexican officials held a previously unreported call Saturday with FAA officials to unsuccessfully argue against the downgrade, sources told Reuters.

The FAA review that began in October and went through February found about two dozen noncompliance issues and Mexico had only resolved four, officials said.

Mexico has been a top vacation spot for U.S. travellers during the pandemic, spurring U.S. airlines to redirect capacity they had previously flown to Europe before transatlantic travel restrictions were imposed last year. Nearly 2.3 million passengers travelled on U.S.-Mexico flights in April – more than three times the next most popular country destination.

The downgrade means U.S. airlines will no longer be able to market and sell tickets with their names and designator codes on Mexican-operated flights.

Delta Air Lines (DAL.N) said on Tuesday an FAA downgrade was not about its partner Aeromexico and that the action will have little impact on customers. read more

Delta said it will need to reissue reservations for some Aeromexico operated flights that were booked through Delta.

Unlike Aeromexico, Delta will be able to continue increasing routes and frequencies as demand recovers, said Rene Armas Maes, commercial VP and associate at Midas Aviation.

“U.S. carriers win big time,” said Armas Maes.

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