Aviation Manned + Unmanned Aircraft
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7/29/20 1. Market Landscape + Trends 2. Market Players Sector Opportunities in Mexico: 3. Market Entry Aviation Manned + Unmanned Aircraft Market landscape + trends Mexico in relative terms ● 10th largest country globally – 125 million people – 40% the population of USA ● 11th largest economy – Between France + Korea in total market size (PPP) ● Shares with the USA: – Economic region (USMCA) + supply chains – Conjoined airspace – Connected highways, power grid, pipelines, telecom – Intense border cooperation for trade + travel – Intense cooperation on regional security – Plus interconnected political + family histories – Mexico has 50 consultates in the United States – Language: US is the 2nd-largest Spanish-speaking population in the world after Mexico; meanwhile, aviation united by English o!rces" en.#ikipedia.or$%#iki%List&of&co!ntries&and&dependencies&'y&pop!lation en.#ikipedia.or$%#iki%List&of&co!ntries&'y&(DP&*PPP+ 2 Ima$e so!rce: slideplayer.com%slide%1-1-3./2% Privately operated planes + helicopters 0ivil 0ommercial fli$1ts (plane + helicopter+ 0ommercial car$o Drones 3ecreational, Private non2commercial, 0ommercial Aircraft generating (overnment2operated aircraft demand for MRO Virginia Planes shops services + 5elicopters products in )rones Mexico Planes 5elicopters Drones Military + La# Enforcement 3 Civil aviation ● nd ● 9,122 registered Mexico, 2 globally in general aviation, after US – 300 entities with registered GA planes aircraft – Experienced significant growth since 2008 ● Aerolíneas Ejecutivas largest GA operator: 32 aircraft ● 77 airports – Reports 15% increase in clients because of pandemic; similar to report by Transportes Aereos Pegaso ● 1,471 aerodromes – 2,700 USD average cost per flight-hour for its smallest planes has reduced by half due to demand ● 536 heliports ● Best-selling private jets: Kinnear Learjet, Citation (Cessnas), Hawker, Beechjet, Grumman and Gulfstream ● Toluca Airport, located in Mexico State beyond the Santa Fe business district from Mexico City, is the busiest GA hub ###.milenio.com/ne$ocios%v!elos-privados2a'ren2s!s2alas2a-pesar2de-la2crisis 5elicopters .</ re$istered civil helicopters active over Mexican airspace States most active in helicopter traffic 1)Mexico City Metro area4 population 23 million+; 2nd-most private 2)Mexico State 1elicopters in t1e #orld after ao Pa!lo 3)Campeche 4)Tabasco T1e (!lf of Mexico is an important offs1ore oil re$ion 5)Tamaulipas 6)Veracruz tates 1ome to ma>or cities of Monterrey and 7)Nuevo León (!adala>ara4 respectively4 and important >!mping off 8)Jalisco points for remote industrial activities like minin$ )(A0 2/17 *no# kno#n as A$encia 9ederal de Aviaci:n 0ivil+ Helicopters afety Team-México4 0T. 9eb 2/16 6###.for'es.com.mx%voom-=!iere2=!e2evites2el2trafico2de-la2cdmx2via>ando2en21elicoptero% Commercial airlines Million passen$ers ● 3% of Mexico's GDP – In relative importance to the national economy, similar to the industry in the US (also about 3%) ● 352 scheduled service planes – average age 9 yrs – 15 concessioned operators ● Average growth in passengers carried before pandemic )omestic ,nternational ,ncrease total was 9-10% per year (since 2013) – In 2018, 97.3 million passengers Aircraft in t1e MB airline ind!stry 2/19 – National average of annual trips per person 0.4 vs 2.5 in US ● High connectivity – Mexico City and Cancun most connected airports in LATAM – Half of passengers are international ● 7 of top 10 international routes to US cities (2018) Aviaci:n Mexicana en 0ifras 2/18 @ A$encia 9ederal de Aviaci:n 0ivil % ecretarAa de 0omunicaciones y Transportes ###.iata.or$%contentassets%af<8/<'f193d--ef'2/.1038383cd8-a%mexico2co!ntry-report2en.pdf ###.iata.or$%contentassets%cf15de0?/--e4.'<'<e1ebf?a3613ed-%economic2st!dies2!sa2en$2final.pdf ###.sct.$o'.mx%fileadmin%Direcciones(rales%)(A02arc1ivo%mod!lo6%flota-re$22/2/21-trim.pdf Mexico City ,nternational Airport 1)Mexico’s busiest airport, Benito Juarez Mexico City International Airport (AICM), has operated at or above capacity for at least a decade 2)AICM congestion throttles air traffic for the entire country ● Keeps airfare high compared to the US ● Limited slots for international connections ● Consistently delays flights in other cities 3)No room to add a 3rd runway at AICM 4)After the politically motivated termination of a previous effort in Texcoco, Mexico State, the “new AICM” is being built at the soon-to-be-former Santa Lucia Air Force Base, also in Mexico State ● Carriers still reeling from the Texcoco disruption, disputing slot + int’l connection configurations 5)National airspace redesign ● Nearby airports Queretaro, Toluca, and the “old” AICM may all have interesting opportunities to play different roles than in the past ● Other airports like Tijuana and Tamaulipas at the US border also open to opportunities, especially with freight ● Improved capacity for Mexico City as a hub for international connections by foreign carriers ,n the control to#er of AI0M4 operated 'y ECEAM *p1oto from Dikimedia) 0argo Cargo in 2018 Top airports for freight in 2019: 9astest $ro#in$ MX car$o lines ● 740k tonnes international (82%) 1) Mexico City – 1 in 8 tonnes of international cargo = to or from Los Angeles 2) Guadalajara ● 170k tonnes (18%) domestic – 3) Queretaro 1 in 8 tonnes of domestic cargo = between Mexico City + GDL In 2019 4) Monterrey ● Domestic cargo traffic rose 4% 9rei$1t Moved E Tonnes ● International followed global tendencies dropping 6% Mexican government list of AVSEC approved freight carriers US, European, + Asian cargo carriers evenly dominate half the market. Queretaro, 2-3 hours west of Mexico City, and Nuevo Laredo, at the Texas border, )omestic ,nternational ,ncrease are both looking to increase their cargo activity during national airspace rebalancing that has been in the works. 0T. A$encia 9ederal de Aviaci:n 0ivil4 2/2/ a21.com.mx%aerop!ertos%2/2/%/2%/.%va2contracorriente2car$a2aerea2domestica2en-mexico a21.com.mx%aerop!ertos%2/19%10%1-%imp!lsan-n!evo-laredo2como21!'2de2car$a ###.eleconomista.com.mx%estados%A,F2contin!a2con2crecimientos2a2do'le2di$ito2en2car$a22/19/3/62///-.1tml ###.sct.$o'.mx%fileadmin%Direcciones(rales%)(A02arc1ivo%mod!lo-%oper2car$a2se$2avsec2/./32/.pdf Drones ● Mexico has 5% of the world Confirmed use of drones in Mexico drone market ● Agriculture ● Chinese company DJI ● Fishing + livestock supplies 85% of civilian drones ● Surveillance + public / private security in Mexico ● Infrastructure + construction, especially energy ● In 2019, 2,140 drones newly ● Oil + gas / mining registered ● Entertainment Mexican drones: USTI (above) + Hydra Technologies (below) ● For 2020 nearly 6,000 more ● Aerial photography + mapping were expected ● Humanitarian aid ● USMCA expected to be ● Fumigation global region with most ● Application of disinfecting liquids in public spaces drone demand (stemming ● from renewable energy Traffic control installations) ● Tourism Pw0 2/16 0T4 A$encia 9ederal de Aviaci:n 0ivil4 2/2/ ###.estadomayor.mx%832<2 . ###.xataka.com.mx%otros21/'alam-s2-62!av2asi2es2el2dron2disenado2en-mexico2=!e2vi$ilara-los2cielos2de2sinaloa Maintenance, repair + over1aul ● 308 currently active aeronautical Cota'le M3G centers workshops in Mexico, list maintained here ● Delta-Aeromexico aka (518 total) TechOps MX – Details of each workshop’s approved capabilities can be reviewed here ● Airbus Helicopters ● Mexicana MRO Aeromar 9or a w1ile t1e lar$est shop in Mexico4 t1e last 1oldo!t of t1e def!nct international passen$er ● Avemex carrier Mexicana has so!$1t since 2018 to sta'iliHe its M3O operations for an event!al sale. ● 3o'erto Eriete4 a major share1older in Avianca4 Ale Service Center made an offer to b!y it in Jan!ary 202/. ###.sct.$o'.mx%fileadmin%Direcciones(rales%)(A02arc1ivo%mod!lo1/rel2talleres-nacionales.pdf ###.sct.$o'.mx%fileadmin%Direcciones(rales%)(A02arc1ivo%mod!lo1/talleres-nacionales2enero.pdf a21.com.mx%aerolineas%2/2/%/-%12%covid219-mexicana-mro2se2=!eda2con2tres2clientes ###.elfinanciero.com.mx%opinion%dario2celis%tiene2ya-la2sct2oferta2de2compra2del-mro2de-mexicana 1/ centreforaviation.com/news%aeromar2to2service2american2>ets2atr2at-mexico2city-mro2facility2.338<- Important players ● (overnment ● Gperators ● Hi$hly visi'le s!ppliers ● Associations + networking 11 Government regulators ● Secretariat of Foreign ● Agencia Federal de Aviación Civil (AFAC) Relations – In 2020 replaced the DGAC as the main civil aviation regulator – In 2011 with Mexican – Pertains to the Secretariat of Communications and Transport congress effected ● Mexico’s entry into the Guidance set / enforced by AFAC Wassenaar – Ley de Aviación Civil (last updated 2018) Arrangement – US-Mexico 2015 open skies agreement – In 2017 witih Mexican ● congress, authorized Drones must be registered with AFAC increase in foreign – Flight Rules for Drones in Mexico: CO AV-23/10 R4 entered into ownership of air force as NOM 107, Jan 2020 services companies – Restricts the operation of UAVs with foreign registration and from 25% to 49% operation of MX UAVs by foreigners in Mexico ###.dip!tados.$o'.mx%LeyesJi'lio%pdf%26&18/<18.pdf ###.sct.$o'.mx%transporte2y-medicina-preventiva%aerona!tica2civil%32servicios%36-rpas2drones ###.#1itecase.com/p!'lications%alert%new2air2transport2a$reement2'et#een2!s2and-mexico 12 ###.c12aviation.com/portal%news%62162-mexican2senate2okays2'!mp-in2airline2forei$n2o#ners1ip2cap Government operators ● Civilian federal gov operators ● Military + law enforcement – Tend to be autonomous – Please see separate report addressing organizations these