New Treaty Will Expand Air Travel between US and Mexico

A new treaty between the United States and Mexico promises to greatly expand air travel between the two neighbors. U.S. and Mexican authorities believe this will lead to a boost in travel, shipping, and economic exchange between the two nations. Meanwhile, air carriers have roundly supported the treaty, anticipating substantial additions to their annual revenues.

A new treaty between the United States and Mexico promises to greatly expand air travel between the two neighbors. U.S. and Mexican authorities believe this will lead to a boost in travel, shipping, and economic exchange between the two nations. Meanwhile, air carriers have roundly supported the treaty, anticipating substantial additions to their annual revenues.

U.S. Transportation Secretary Anthony Foxx said, “This agreement is the result of the commitment on both sides of the border to strengthen the strong bonds of trade and tourism between our two countries, and demonstrate our shared commitment to a competitive, market-based international economic system.” 

Mexico’s Transportation Communications Minister Gerardo Ruiz Esparza agreed, adding that the accord “lays the groundwork to take advantage to the maximum of the boom in the airline industry happening in both countries.”  

Members of the air travel industry were also enthusiastic about the agreement. Robin Hayes, President and CEO of JetBlue, said, “I applaud the U.S. government for its diligence in securing a forward-thinking aviation treaty with Mexico … Across the globe the U.S.-led liberalization of the skies has proven to increase travel options for consumers, grow jobs, and strengthen economies.”

According to Consumer Affairs, the treaty will expand market access for air carriers, allowing airlines and air freight carriers from the United States unlimited access to the Mexican marketplace. Mexican carriers will have similarly unfettered access in America. Moreover, air carriers on both sides of the border will enjoy a number of additional rights, greater flexibility in setting prices, and a number of other preferential rights in the market of the other country over carriers from other nations. 

Previously, each nation suffered from numerical limits on the number of airlines from the other country allowed to operate within its borders. The new agreement removes these limits. That could lead to a number of smaller carriers picking up routes that were previously forbidden to them, greater competition, and better prices for consumers.   

The treaty also benefits air cargo carriers. That should improve shipping times between Mexico and the US, reduce international shipping rates between these nations, and expand choices for consumers. 

While the treaty largely benefits consumers, investors should smile, as well. Delta, JetBlue, and dozens of other air carriers released statements supporting the treaty. Analysts believe the greater ease of doing business will contribute to a substantial uptick on the bottom line for these companies while simultaneously stimulating trade between the two countries.