The United States and Mexico recently made an air transport agreement to open their aviation markets. Previously, rules had generally limited two or three airlines from each country to a particular route. This new provision removes the limits on the number of airlines serving any U.S.- Mexico city. Simply put, airlines in both countries are now able to fly whatever routes they want, as often as they want, and even set their own prices. American Airlines, Delta, and Southwest have already announced that they will be offering new flights south of the border later this year. United has said they are watching the demand for flights and will respond accordingly.
What does this all mean? For starters, it will expand opportunities for travel between the U.S. and Mexico by bringing way more options for travelers, which will most likely result in cheaper fares as well. Base fares between the U.S. and many destinations in Mexico are already low, however both countries require taxes that drive up the prices of each ticket. Taxes and fees can make up between 20 and 30 percent of an economy-class ticket resulting in an expensive end price. This new agreement should eliminate that.
Airlines on both sides of the border have already begun taking steps to offer more flights and serve new routes. Communities in both countries should anticipate economic gains in tourism as greater numbers of visitors are expected to arrive on more flights. As of right now, this new agreement does not remove limits on takeoffs and landings at the main international airport in Mexico City. Therefore, U.S. carriers will focus on resort towns in Mexico.
Besides expanding travel opportunities, this new agreement will also expand trade opportunities by bringing more efficient and cost-effective trade between U.S. and Mexican cargo carriers. Mexico is the largest trading partner of the U.S. already – having an estimated $600 billion trade in goods and services. The likelihood for growth is now greater with this new aviation agreement.
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