The year 2020 was looking to be a banner one for commercial aviation in Mexico. Passenger traffic in the first two months of the year was up nearly 10 percent from a year earlier. And then…
I called up Richard Aboulafia, an aviation guru and Vice President for Analysis at the Teal Consulting Group, to ask him when (and if) he thinks air travel will get back to normal, when the world might see global traffic figures back at 2019 levels. “2023,” he answered, citing the need for a COVID-19 vaccine to be developed and deployed, as well as for the world’s economies to recover from the virus-induced devastation.
Aboulafia is an optimist. Many analysts are speculating that airline travel may never again return to pre-pandemic levels. As businesses adapt to an increased reliance on videoconferencing, the theory goes, more of the travel they once deemed essential will now seem unnecessary. Leisure travelers, for their part, might rethink splurging on frivolous escapades that require them being crammed in with hundreds of fellow potential pathogens in aluminum tubes for hours, vaccine or no vaccine. And even before the coronavirus, flying was already being decried by environmentalists on climate change grounds.
Aboulafia isn’t buying it. Human history suggests that in times of peace and rising prosperity, people have a yearning to be more connected with each other, and to experience the world.
“There is a tendency in the middle of a crisis to yell ‘This changes everything,’” Aboulafia says, “but it very seldom does.” In the immediate aftermath of 9/11, he recalls, plenty of people warned that flying would never be the same. “If they meant we’d no longer be able to take liquids past security, they were right,” he says, but wrong in suggesting that we wouldn’t take to the skies in equal numbers again. Worldwide, 4.3 billion passengers flew in 2018, more than twice as many as 15 years earlier.
Still, Aboulafia concedes the current crisis is unprecedented in scale. US traffic is down 95%, and even the rosiest global projections for 2020, which assume a healthy bounce back in the second half of the year, foresee a 48% decline in air travel as compared to 2019.
These figures are good news in one sense – people are staying at home, practicing social distancing, and flattening the curve. But you can’t help but wonder whether the airline industry, a vital circulatory system for our modern economies, can weather the storm, and what shape it will be in on the other side. In many countries, including the United States, the conundrum is being resolved by public grants and loans to ensure airlines’ survival.
US-Mexico aviation links have expanded since 2016, when a liberalization treaty went into effect that allowed airlines to fly at will between the two countries (though constraints at Mexico City’s outdated airport continue to impose limits there). The deepening Aeroméxico-Delta alliance, the growing interest in the Mexican market by United and American, and the expansion of Mexican low-cost carriers helped. New routes have proliferated, connecting places like Chihuahua and Albuquerque; Zacatecas and San Jose, CA; and Aguascalientes and Chicago, Midway.
Many of these routes are now suspended, as airlines prioritize links between hubs during the crisis, with lesser frequency at that. The question is whether this retrenchment becomes a permanent reversal.
The Mexican government’s unusual austerity is a source of alarm. Mirroring its refusal to provide meaningful emergency support for other employers across the economy, the López Obrador administration has not rushed to support this strategically important industry (one that employed 1.4 million Mexicans in 2018 and contributed an estimated $38 billion to the economy).
Even before the pandemic, Mexico’s aviation sector was vastly underdeveloped when you consider the country’s demographics, economic potential, and geography. Judging by the state of Mexico’s aviation infrastructure, you would never guess Mexico has bet heavily on trade, integration with the US economy, and tourism for its national development.
“Mexico is many ways the country that aviation forgot,” Aboulafia says.
AMLO’s capricious decision to block completion of Mexico City’s desperately needed new airport is a sad case in point. And now the very survival of some of Mexico’s airlines could be in doubt, particularly if the crisis (defined by both virus and the government’s indifference) lingers past the summer.
The uncertain outlook for airlines connects to a larger question raised by the pandemic: Will all this accelerate or reverse globalization?
Imagine if at some point Interjet or another Mexican carrier needs an injection of capital to survive. Does AMLO nationalize the airline, maybe even bring back the defunct Mexicana brand? Or does he instead encourage one of Delta’s major US competitors to absorb the carrier (perhaps by relaxing foreign ownership limits)? COVID-19, in other words, adds urgency to the question of whether we will see a return to a more nationalistic statism, or a doubling-down on openness.
Governments have historically asserted sovereignty claims on matters of aviation and flagship carriers, but globalization has overtaken some of those reflexes. In Europe, the Dutch allowed their beloved KLM to be acquired by the French (becoming part of Air France); the Swiss ceded their national carrier to Germany’s Lufthansa Group; and the holding company of British Airways controls Spain’s Iberia. And back in North America, Delta already owns a 49% stake in Aeroméxico.
Aboulafia believes we might not necessarily see a zero-sum showdown between globalization and reinvigorated nationalism. He thinks we’re in for a period of “fragmented globalization” that emphasizes multinational regionalism when it comes to supply chains, foreign direct investment, and travel flows.
If you’re looking for silver linings in a pandemic, that could augur well for North American integration, assuming erratic political leaders in Washington and Mexico City don’t stand in the way of capitalizing on the opportunity. And, of course, assuming we still have airlines to connect us when it’s safe to fly again.
* Andrés Martínez is a professor of practice in the Cronkite School of Journalism at Arizona State University and the editorial director of Future Tense, a Washington, D.C.-based ideas journalism partnership between ASU, Slate magazine, and New America.Twitter: @AndresDCmtz