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Aeronautical industry: FDI stagnates in Mexico

Mexico attracted 75 million dollars of Foreign Direct Investment (FDI) in the aeronautical industry in the first quarter of 2022, in an environment in which these flows have remained stagnant in the last decade.

From 2012 to 2021, the capture of FDI in the Mexican aeronautical industry averaged 201 million dollars, reaching the maximum level in 2014, when the investment was 386 million dollars, according to data from the Ministry of Economy.

As was the case with much of the Mexican economy, in 2020-2021 the aerospace industry was severely affected by the Covid-19 pandemic.

According to FEMIA, Mexican exports decreased between 32 and 35% in 2020 and the sector was greatly affected by the general decrease in passenger air traffic worldwide, estimated by the International Air Transport Association (IATA) at a total of 48 percent.

Despite this, the US Department of Commerce reports that Mexico has fared better than most in its recovery.

Although the number of domestic and international seats offered in 2021 is expected to be 15% lower than in 2019, Mexico ranks third in this metric globally.

Aeronautical industry

From January to April 2022, exports of the aerospace equipment manufacturing industry from Mexico to the United States totaled 693 million dollars, a year-on-year increase of 31%, according to data from the Department of Commerce.

This amount represented 4.7% of total US imports corresponding to this manufacturing segment.

In the last decade, the participation of Mexico in the total imports of the aerospace equipment manufacturing industry to the United States has fluctuated between 3.2 and 4.5%, considering complete years.

Global indicators

In 2021, the aviation business showed strong signs of recovery from the pandemic, indicates the Canadian company Bombardier.

Industry indicators such as the industry sentiment index, US corporate profits and second-hand private jet inventory levels all trended in the right direction, reflecting strong improvements in market conditions. market compared to the previous year.

In 2021, economic recovery and further reopening measures were supported by vaccine access and policy support, led primarily by developed markets.

Meanwhile, industry confidence, measured by Barclays’ Business Jet indicator, registered 83 points for 2021, compared to 58 for 2020, which is above the threshold of market stability.

Commercial aviation utilization improved year over year in the United States and Europe in 2021 by 42 and 33%, respectively.

The increase is mainly due to vaccination, the relaxation of travel restrictions, the lack of commercial flights available and the increasing demand for security features offered by private aviation.

 

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