Data: With Bilateral Air Services Agreement Approaching, Who Owns the Skies Over Mexico?

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Analysis by:  Luke Bujarski

The Bilateral Air Services Agreement (BASA) currently in negotiation between the U.S. and Mexico is a huge deal for air carriers on both sides of the border. Overall passenger volumes could climb by as much as 57% over the next four years, according to a study conducted by the Mexican aviation authority DGAC.

Mexico's low cost carriers are certainly gearing up to bring the fight to the U.S. airlines, that currently dominate regularly scheduled flights between the two countries. Volaris and Interjet made significant progress growing their international coverage in 2015. BASA will likely become an open door for these two rising stars to expand further north into key U.S. hubs.

As BASA approaches, Delta's move to increase its stake in Aeromexico up to 49% was also likely a preemptively smart move (although the real prize in this alliance was access to Mexico's big domestic market).

What will change with BASA?

Caps on the number airlines that can now legally operate between certain routes will be lifted. In theory, this will bring down prices as airlines compete in an already competitive air space. Skies are also set to open up for charter flights, as well as cargo-only operations. Restrictions on commercial agreements will also be lifted. This will give airlines the ability to enter into mutually beneficial marketing agreements with carriers from the other side.

As BASA approaches, what do the skies over Mexico currently look like? We analyzed the latest passenger data on Mexico's domestic and international arrivals and found that overall, Mexico's airways are looking more and more "low-cost" and "Mexican" these days.

We found that Aeromexico lost market share, while Interjet and Volaris gained. We also looked at international arrivals by airline and found that United and American lost ground in overall international arrivals to Mexico, between 2014  and 2015.

See for yourselves:

Domestic: Market Share (%) of Passenger Arrivals to Mexican Airports

Source: Datatur

Domestic: Y-o-Y (%) Change in Passenger Arrivals by Airline, 2014-2015

Source: Datatur

International: Market Share (%) of Passenger Arrivals to Mexican Airports

Source: Datatur

International: Y-o-Y (%) Change in Passenger Arrivals by Airline, 2014-2015

Source: Datatur

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