Mexico City Airport Plan Baffles Airlines Seeking Answers

(Bloomberg) -- Four months after President Andres Manuel Lopez Obrador pledged to scrap a $13 billion airport project for Mexico City, the airline industry is bursting with questions about his plan to operate three hubs for the nation’s capital. His administration is still short on answers.

Running three airports will be “very, very, very challenging” given Mexico City’s altitude, temperature and surrounding mountains, Alexandre de Juniac, head of the International Air Transport Association, said at an airline conference in the Mexican capital. “Let me be perfectly clear, there will be no compromise on safety.”

With other panelists and attendees echoing his concerns at the conference, Lopez Obrador’s top transportation official had few details to offer in response. “We need to look for a valid solution that is absolutely safe from an aeronautical standpoint,” said Transport Minister Javier Jimenez Espriu.

The safety focus underscored the airline industry’s misgivings about Lopez Obrador’s intention to upgrade the existing hub and an airport in nearby Toluca, while tapping the Defense Ministry to transform a military base into a commercial airport. Aeronautical analysts at Mitre Corp. have argued that the Santa Lucia air base can’t safely operate in tandem with Mexico City’s main airport if capacity grows at both, which would be needed to ease saturation.

Trekking out to Toluca from any of those two airports can take an hour and a half or more, depending on traffic, complicating passenger connections.

Texcoco Cancellation

Lopez Obrador canceled his predecessor’s project to build a major new airport in Texcoco, east of Mexico City, which was already one-third built. That hub was designed to replace the current airport, which is congested -- and constrained from adding runways.

“Airlines urgently need to know what infrastructure will be available and when,” de Juniac said at the conference Thursday. “And if the decision is politically motivated, the results will be sub-optimal.”

Other questioners at the IATA conference zeroed in on Lopez Obrador’s plan to ask the military build and operate an airport meant for commercial use. Does it make sense? Is the model used elsewhere?

De Juniac, who represents airlines around the world as head of IATA, said it’s definitely not common. At best, the operation would have to be split among the military and government offices that handle civilian affairs such as immigration and customs, he said.

‘Common Sense’

Local transportation links also came in for scrutiny. The government has said that international and domestic flights will be split among the three airports, a move that would create logistical challenges for airlines.

“We’ve never seen good connectivity between airports that are 70 kilometers (43 miles) apart,” said de Juniac, the former chief executive officer of Air France-KLM. “That’s just common sense.”

Grupo Aeromexico SAB CEO Andres Conesa, speaking on a panel of airline executives, agreed.

“Airlines like ours that operate wide-body aircraft need to operate out of one single airport, we need one single operation center,” he said.

‘Deal breaker’

Enrique Beltranena, CEO at low-cost airline Volaris, said operating out of Toluca would threaten to generate additional costs.

“That would be a deal breaker for us. I can’t operate something that is just not economically viable,” he said.

While Volaris was “born” out of Toluca, he said, the carrier eventually reduced flights at the airport because the market “isn’t there.”

Aeromexico shares fell 1.5 percent to 20.50 pesos at 10:13 a.m. in Mexico City. Volaris rose less than 1 percent to 16.62 pesos.

Transport Minister Jimenez Espriu said he knew the Texcoco cancellation has ranked as one of the least popular decisions so far by the new president, who took office in December.

“But I’m sure people will eventually come around,” he said.

To contact the reporter on this story: Andrea Navarro in Mexico City at anavarro30@bloomberg.net

To contact the editors responsible for this story: Brendan Case at bcase4@bloomberg.net, Carlos Manuel Rodriguez

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