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Many specialists estimate that the number
o domestic airline passengers in Mexico
will rise by 5-7% this year ater the heavy
blow sustained during last years global
recession. In the midterm, they orecast
that the growth rate will s tabilize at around
5.5% per year. The rebound in demand also
improves the sectors outlook in light o the
major hit it took in recent years because o
high uel costs, not to mention the human
inuenza outbreak and the worldwide
economic recession.
As airline trafc recovers, it will also be
necessary to expand airport inrastructure
in the country. Some projects are already
underway while others are tied into various
government plans. In addition, some
regulations in the country have begun to see
change, prompted by the launch o a bidding
process or the Riviera Maya airport on May
11 that will encourage private participation.
Some 34 airport projects are included in
the 2007-2012 National Inrastructure
Program (PNI) including 13 or expansion,
18 complementary works and 3 new
airports: Mar de Corts, Ensenada and
Riviera Maya.
The PNI also looks at developing regional
airports to improve connections. Airport
concession holder ASA says the country
has the necessary inrastructure to meet
demand or the next ten years; however, as
part o sector policy, some inrastructure
projects are being considered with a view
to reinorcing existing acilities based on
growth plans at each airport.
In this report, we will evaluate the
outlook or Mexicos airline industry
and the inrastructur e needs that have
been identiied or accommodating
expected growth.
May 2010
EXECUTIVE SUMMARY
Mexicos Airline Industry,ying toward expansion
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thismonthsseries:
Getting back on its feetAccording to global aviation industry consultancy OAGAviation, to the month of May this year passengerairline operations for domestic travel in Mexico havegrown 2.9% year on year, with an outstanding 12.7%rebound for operations at low cost carriers.
ConsolidationIndustry specialists said that the national airlineindustry is undergoing a process of supplyconsolidation which will not take place withoutmergers between airlines or a thinning of the pack.
Higher demandEstimates from Aeropuertos y Servicios Auxiliares(ASA), a decentralized agency that operates24 airports throughout the country, indicate thatpassenger air travel this year within the ASA gridwill reach yearly growth of between 5% and6%, similar to growth on a national level.
The costs in MexicoMexico ranked 51st out of 133 countries evaluatedin the Tourism and Transport Competitiveness Index(ICTT) compiled by the World Economic Forum(WEF) in 2009. As regarding infrastructure for airtransport the country ranked 40th overall, althoughin the sub-category of air transport infrastructurequality it took 56th place and in terms of airportfees it ranked 126th.
PNI ProgressSome 34 airport projects are included in the2007-2012 National Infrastructure Programincluding 13 for expansion, 18 complementaryworks and 3 new airports: Mar de Corts,Ensenada and Riviera Maya.
Other needsThe PNI also looks at developing regional airportsto improve connections. The country seems tohave the necessary infrastructure to meet demandfor the next ten years; however, as part of sectorpolicy, some infrastructure projects are beingconsidered with a view to reinforcing existingfacilities based on growth plans at each airport.
ConclusionThe role of the private sector in the airport sectoris increasingly urgent. Although the lack of clarityand information on government projects arefrequent complaints from the various economicagencies or research and analysis groups, several
adjustments have appeared in recent years thatare slowly phasing out roadblocks to investment.
Boxes- The three airport operators and investorpreference- The series of problems at AICM
60,000
50,000
40,000
30,000
20,000
10,000
1989199019911992199319
941995
1996199719
981999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Mexican passenger trafc over last 20 years
Source: SCT
18,543
29,131
30,922 35,287
42,176
45,406
53,300
46,971
(1000s)
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Infrastructure Daily
At the beginning of 2008, Mexicos government created a
US$3.9 billion National Infrastructure Fund to nance projects
worth a total of US$25 billion in this sector over the next 5
years. In Brazil, a federal plan to accelerate economic growth
includes investments in the order of US$30 billion in roads
and highways between 2007 and 2010, and in Peru, the road
infrastructure decit is some US$7 billion.
From whichever angle, infrastructure investment requirements
(and plans) come to billions of dollars. While this is nothing
new, this time round the possibilities of these investments
being made are higher than theyve ever been before.
This means that in the next fewyears, business opportunitiesare as numerous as they are
lucrative.
This is the context in whichBNamericas is launching a new
product, the Infrastructure
Intelligence Series, which every
month will focus on the biggest
trends and topics within the region
in order for you and your company
to have all the information and
analysis necessary to fnd your way
among the projects and regulations
upon which this growing and
attractive sector of Latin American
business is based.
The Infrastructure IntelligenceSeries will focus on topics such as:
Concessions Privatizations Port development Logistical integration projects Airports Railways Urban transport Water and waste treatment
CONTACT US
Contact us today to receive afree 2-week trial subscription:
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Written and researched by
Ixel Yutzil Gonzlez
Content Development & Analysis
EditorRal Ferro
Executive editorHenriette Iraabal
Financial services analystMara Alejandra Moreno
Mining analystLaura Superneau
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BNamericas Infrastructure Group
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