On a sunny Friday morning this month, the outside plaza at Mexico City’s new Felipe Ángeles airport was so quiet you can hear bugs chirping, interrupted all of the sudden by the roar of three F-5 fighter jets overhead.
The gleaming airport is essentially the most seen signal of how Mexico’s president Andrés Manuel López Obrador has reshaped aviation in Latin America’s second-largest financial system — by inserting the military throughout the sector and making an attempt to push airlines to make use of his new hub.
The course of has put him at odds with home and worldwide airlines and the US authorities, and to this point has not lured a lot passenger site visitors. Inside the terminal, not one of the 100 check-in desks had a queue, whereas at arrivals a recruiting workplace invited scarce passengers to affix the military.
Old-school leftist López Obrador in 2019 tasked the defence ministry with constructing the airport at a price of $5bn after cancelling {a partially} constructed one designed by architect Norman Foster, claiming that the undertaking was suffering from corruption. Felipe Ángeles opened to nice fanfare final yr.
The new airport — which is run by the military — is slick and ethereal however can also be 44km from town centre, with restricted floor connections. Airlines say they must set ticket costs so low to fill planes that they battle to earn a living.
About 7,700 passengers flew to or from the airport every day in July, in contrast with 90,500 at Benito Juárez, the capital’s saturated principal airport.
López Obrador is making an attempt to alter that. This month, the armed forces in Mexico will begin promoting tickets by itself industrial airline out of the brand new airport.
At Benito Juárez, pure cargo operations have been stopped by presidential decree this yr, elevating ire amongst US officers. Passenger flights have been minimize sharply in a second authorities choice in August, this time prompting a fierce backlash from worldwide and native airlines.
Peter Cerda, regional vice-president at airlines affiliation Iata, mentioned: “Making the unilateral decision of just pushing capacity somewhere else . . . without good analysis, particularly without collaboration with the industry and working together like it occurs in every other city around the world, that’s what’s been ineffective here.
“Ultimately the passenger is going to suffer . . . with less availability of flights, [fewer] destinations and higher prices.”
López Obrador has enlisted the armed forces to assist carry his tasks to fruition throughout the financial system, from constructing practice traces to authorities financial institution branches, claiming they’re extra environment friendly and fewer corrupt than bureaucrats. But their insertion into aviation has been particularly pronounced.
The military now controls 12 airports together with a brand new one it’s constructing within the hipster seaside resort of Tulum within the Yucatán peninsula. The navy controls seven airports, together with Benito Juárez, and customs at each terminal within the nation. Before López Obrador got here to energy, state-owned industrial airports and customs companies have been run by civilian ministries.
“What do you train an armed forces to do? Well, they’re supposed to defend the homeland,” mentioned Ryan Berg of the Center for Strategic and International Studies. “They’re not supposed to run an airport.”
For its new airline, the federal government spent 816mn pesos to purchase the model Mexicana, an airline that went bust in 2010. Mexicana shall be subcontracted to a 3rd occasion, which means cabin crew shall be civilians reasonably than military, however generals will oversee its administration.
López Obrador has relied on the military to grasp his political tasks within the younger however steady democracy, regardless of considerations over an absence of accountability and allegations of corruption. He has defended his technique as certainly one of engaged on behalf of the Mexican public.
“Previously the neoliberal governments, that were at the service of a predatory minority, worked to sell public goods, goods owned by Mexicans,” he advised a press convention in August. “We haven’t sold; on the contrary, we have bought public companies.”
A handful of countries together with Colombia and Argentina have small military-run passenger airlines, however they have been principally arrange many years in the past to fly to underserved distant areas.
In a presentation seen by the Financial Times, a Texas-based firm referred to as Petrus Aero Holdings mentioned it had a preliminary lease settlement with the federal government for 2 Boeing 737-800s for $350,000 every per thirty days. Petrus would earn one other $627,000 a month for added companies within the first six months earlier than including one other eight planes, the presentation mentioned.
Paul O’Driscoll, head of advisory for the Americas at Ishka, an aviation knowledge group, mentioned the costs set out within the presentation have been “not cheap, that’s for sure”.
He added that any lessee going through a decent deadline to start operations would pay extra, significantly within the present market the place demand for plane exceeds provide. Luis Evia, senior enterprise adviser at Petrus, mentioned the figures have been “incorrect and exaggerated” however that due to confidentiality agreements, he couldn’t give extra particulars.
He mentioned the corporate, now renamed SAT Aero Holdings, would offer companies together with crews and upkeep and had employed skilled specialists from the unique Mexicana Airlines.
The defence ministry didn’t reply to a request for remark however put aside some 8bn pesos for the airline within the 2024 draft price range. López Obrador mentioned tickets would go on sale this month between the brand new airport and main cities already lined by non-public sector corporations, such as Guadalajara and Monterrey.
He says the military airline shall be 20 per cent cheaper than industrial carriers, one thing the aviation sector is watching carefully to identify any subsidies which may breach Mexican competitors regulation.
“Mexico is very well served by low-cost carriers,” O’Driscoll mentioned. “They have very new fleets, they have high order books, they’re well-funded. There’s no obvious need for a new competitor.”
A serious stakeholder in the way forward for Mexican aviation is the US. With tons of of every day flights between the 2 international locations, it is without doubt one of the world’s busiest cross-border routes.
This week Mexico regained its Category 1 score from the US Federal Aviation Administration after greater than two years with a decrease score due to security considerations. The improve permits the nation to as soon as once more add new flights and routes to the US, and for US airlines to promote tickets on Mexican-operated flights.
But the Mexican leader’s choice to restrict cargo flights has raised considerations in Washington. Transportation secretary Pete Buttigieg visited López Obrador in June to debate the transfer, which meant corporations confronted delays and better prices as they awaited the brand new transport infrastructure.
The US has prevented publicly criticising Mexico’s authorities, whose co-operation it wants in areas such as migration and safety.
But in a July letter the Department of Transport mentioned Mexico was not absolutely implementing a liberalised transport deal between the 2 nations, citing “recent actions the government of Mexico has taken affecting US carrier operations at Benito Juárez international airport”.
As a consequence it suspended an software from Mexican airline VivaAerobus and US counterpart Allegiant for antitrust immunity, displaying how integration between the 2 nations is already being affected.
“The unilateral decisions without consultation or good analytical study — that’s what’s hurting the industry, the growth and the passengers ultimately,” Cerda mentioned.
