Mexico-U.S. pact to boost airline competition moves closer to adoption

Reuters reports a key committee in Mexico’s Senate on Thursday April 21 ratified a deal with the United States that would boost competition in air transportation, a Senate spokesman said, paving the way for expansion of the world’s second largest cross-border market.

The deal, which both governments have already signed and modifies a 1960 agreement, would open up new routes for airlines to fly between the countries and allow for an unlimited number of flights.

Mexico’s full Senate must still ratify the agreement for it to take effect, which is likely to happen in the coming days.

While some analysts have welcomed the deal, saying it would lower airfares by boosting traffic, Mexican airline workers have complained it would put the country’s airlines at a disadvantage.

The United States, which has a fleet of 7,500 planes compared to Mexico’s 300, accounts for 65 percent of total flights in Mexican airspace, well above the 22 percent offered by Mexican carriers.

Ratification would also remove the main hurdle to a closer tie-up between Delta Air Lines Inc and Grupo Aeromexico SAB de CV. The carriers have asked the U.S. government to grant them immunity from antitrust law so they can coordinate better flight connection times as well as prices, a request that cannot be granted until the aviation accord comes into force.

Delta said last week its deal to buy up to 49 percent of Aeromexico is expected to close this summer.

Source: reuters.com