Mexican Bill May Allow Cabotage in Civil Aviation

Mexican President Andrés Manuel López Obrador sent a draft bill on Dec. 15, 2022, to the Chamber of Deputies pursuing an amendment of the Airports Law and the Civil Aviation Law.

The objective of the bill is to grant more capabilities to the Federal Agency of Civil Aviation (Agencia Federal de Aviación Civil or AFAC) so that it may issue technical and administrative regulations in aviation matters related to the administration, operation, construction and certification of civil airports and airfields, in order to guarantee the operation, protection and efficiency of Mexican civil aviation, as well as to protect the natural environment.

Among the various objectives in the bill is to allow the practice known as cabotage of non-Mexican airlines in Mexican airports and airfields that have the necessary infrastructure and specifications required for such services in routes that are of strategic interest for the development of Mexican civil aviation. Cabotage aims to benefit users of air transport for touristic and business reasons, extend regional routes and grant more possibilities in connecting flights, as well as improve the quality and efficiency of flights at better costs. Article 17 Ter. of the Aviation Law establishes the requirements for granting permits to a foreign airline in order to transport passengers, shipment and mail, or a combination of these, between two destinations of the Mexican territory.

The requirements include the following:

• It has to address causes of public utility, public interest or national security.
• The routes need to be of strategic interest for the development of the Mexican airport infrastructure.
• The Council for National Security must issue a favorable ruling.
• The Mexican airports need to have technical capacities and credited operative services.
• It must comply with any other requirement established by law or applicable regulations.

The bill intends to modify Article 17 of the Airports Law to recognize the possibility that the AFAC grants permits to airlines established under Mexican laws for the administration, operation, utilization and, if applicable, construction of civil airfields that are different from the airports that already exist, as long as said airfields comply with the requirements stipulated in the law at hand.

In these terms, in the event that the Chamber of Deputies approves the bill sent by the president, non-Mexican airlines may operate in Mexican territory as long as they comply with the requirements previously mentioned.

This situation will generate competition for Mexican airlines that did not exist in the past, since there were no applicable regulations regarding the issue, as well as that international agreements entered into by Mexico strictly prohibit foreign airlines to provide such services. (See Article 7 of the Chicago Convention on Civil International Aviation's Eighth Freedom of the Air.)

It is important to bear in mind that the bill was sent to the Communications and Transport Commission of the Chamber of Deputies. The chamber will have sessions under the permanent Commission until Feb. 1, 2023. Additionally, since the bill seeks to modify secondary laws, a simple majority in the Chamber of Deputies is required to approve the bill.

For more details regarding the present matter in the Chamber of Deputies, as well as the regulation of said services in international agreements entered into by Mexico and the scope of the Mexican regulations, contact the authors or another member of Holland & Knight's International Trade Group and Aviation Team.

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