Air services: Mexico has signed 55 agreements

Mexico has signed 55 air services agreements, including, since 2017, with Curaçao, Spain, the Philippines, Finland, Iceland, Israel and the Netherlands.

It has also revised the agreements it had with Germany, Canada and El Salvador, according to information from the World Trade Organization (WTO).

Mexico’s objective in signing and revising these agreements is to increase the degree of openness of air services in order to increase connectivity and thus tourism.

Air services

In general, Mexico does not grant fifth freedom rights.

However, some of the agreements allow these rights to be granted provided that the airline so requests and the aeronautical authority of each Party agrees.

Cabotage is not permitted. However, on the other hand, according to the Civil Aviation Act, private cabotage flights may not be operated either.

FDI

Mexico restricts foreign participation in Mexican airlines providing international services.

Fifty-one percent of the capital must be owned by Mexicans.

For companies operating flights only in the national territory, the Foreign Direct Investment (FDI) cap was increased from 25% to 49% in 2017.

According to authorities, this has had a positive effect on FDI and has allowed for the modernization of the air fleet.

Foreign airlines require a permit, issued by the Federal Civil Aviation Agency (AFAC), to provide international services; and Mexican airlines require a concession (scheduled flights) or a permit (non-scheduled flights).

Tariffs for international services are filed with the ACAA and, in some cases, must also be approved.

On the other hand, air traffic management and air navigation assistance services continue to be provided by Servicios a la Navegación en el Espacio Aéreo Mexicano (SENEAM), a government agency.

Mexico still restricts the participation of foreign capital in airports.

In general, foreign investment may not exceed 49% of the capital of the concessionaire companies.

However, if approval is obtained from the National Foreign Investment Commission (CNIE), foreigners may exceed that limit and invest up to 100 percent.

This situation does not currently exist; the three airport groups operating in Mexico are majority national capital.