Mexico’s Air-Safety Rating Lowered by U.S., Limiting Flights

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Mexico’s aviation-safety ranking has been downgraded by the U.S., prohibiting an expansion of flights from the nation’s carriers to its northern neighbor.

The move by the Federal Aviation Administration on Tuesday is a symbolic blow to Mexico at a time when it has become by far the biggest international market with the U.S. and may force an end to business agreements between the two nations’ carriers.

Existing flights to the U.S. on Grupo Aeromexico SAB and Volaris can continue, but they can’t add service. It could also end Delta Air Lines Inc.’s ability to sell tickets on Aeromexico flights and a similar cooperation agreement between Volaris and Frontier Airlines Holdings Inc.

Mexico joins another eight nations listed as what FAA calls “Category 2” for not meeting international safety standards, including Bangladesh, Pakistan, Venezuela and Thailand. The FAA audits look at whether nations have adequate aviation regulations and the ability to enforce them. The standards are set by the International Civil Aviation Organization, an arm of the United Nations.

“The FAA will increase its scrutiny of Mexican airline flights to the United States,” the agency said in a press release. “The FAA is fully committed to helping the Mexican aviation authority improve its safety oversight system.”

The FAA didn’t cite specific problems it found during an audit from October through February, saying only it had identified multiple areas where the country didn’t comply with minimum international standards. The audits look at issues such as regulators’ technical expertise, training, records and inspection procedures.

Mexico’s Federal Civil Aviation Agency pledged to recover the nation’s Category 1 rating in the “short term,” according to a statement. The Aviation agency said it was operating with limited staff due to the Covid-19 outbreak when the FAA audit took place in October. Mexico’s “national airlines operate with high levels of security and quality in its service, comparable to international standards of any airline that flies in our neighbor country to the north.”

Aeromexico bonds maturing in 2025 dipped 1.4 cents on the dollar to 74.6 cents at close of market, according to Bloomberg data.

Mexico can regain its good standing with U.S. regulators by addressing the areas identified in the audit. The country was downgraded by FAA in 2010, but was reinstated within several months. Vice President Kamala Harris is scheduled to visit Mexico in early June.

In the wake of the Covid-19 pandemic, which has severely curtailed international travel between the U.S. and other nations, Mexico has been the lone bright spot.

Last month, almost 2.3 million people traveled between the U.S. and Mexico, according to data posted by the Airlines for America trade group. The next highest country was the Dominican Republic, with only 606,000 passengers.

Cancun was the leading destination between the U.S. and any foreign airport. Mexico had five of the top seven such foreign destinations, according to A4A’s data.

The FAA action won’t have any direct impact on U.S. carriers, which can continue serving Mexican cities and could even increase flights. With flights to Europe, Canada and other regions severely curtailed, U.S. airlines are now flying about 11% more people to Mexican destinations than the same period in May 2019 before the pandemic, according to A4A.

People who have bought tickets through Delta for Aeromexico flights won’t need to take any action, but the airline may have to reissue their tickets, said spokesman Morgan Durrant.

©2021 Bloomberg L.P.

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