Air services agreements executed by Mexico with Canada, Spain and Switzerland will be modernized.

Mexico has adopted a liberal approach towards air transport in the recent years. The modernized US-Mexico air services agreement that entered into force on August 21, 2016, was the starting point for Mexico to renegotiate its existing bilateral air services agreements with other aviation partners.

On November 14, 2017, the Mexican senate announced that it has received from the president of Mexico (i) the protocol that amends the Mexico-Canada air services agreement, (ii) the new Spain-Mexico air services agreement and (iii) the new Switzerland-Mexico air services agreement.

President Peña pointed out that according to Mexico’s Department of Communications and Transports:

• In 2016 more than 900,000 passengers and almost thirty tons of cargo were carried between Spain and Mexico.
• Mexico is the second most visited country by Canadians for tourism purposes. In 2016, 3.5 million passengers were carried between Canada and Mexico.
• On the other hand, air transport operations between Mexico and Switzerland have decreased in the last years, given that the current air services agreement is not a proper legal framework that encourages Mexican and Swiss air carriers to compete efficiently. Whereas 12,000 passengers were carried in 2010, during 2017 only 2,600 passengers have been carried between both countries. Therefore, a modernized agreement is needed to update the current legal framework.

According to President Peña, if the senate approves the abovementioned bilateral agreements, new tourism and business opportunities will be developed by Mexico with its aviation partners, by providing legal certainty to air carriers from Mexico, Canada, Spain and Switzerland.

After the senate approves the protocol and the air services agreements, they will be published at the Official Journal for them to enter into force.

Which are the main points contained in the protocol and the new air services agreements?

Protocol that amends the Mexico-Canada air services agreement.

On November 10, 2017, the president of Mexico sent to the senate the protocol that amends the air transport services agreement executed between Mexico and Canada on February 18, 2014.

On June 29, 2017, the Plenipotentiary of Mexico signed, subject to the approval of the senate, the protocol that amends the Mexico-Canada air transport services agreement.

Mexico and Canada seek to integrate into their bilateral agreement a flexible fare scheme that simplifies the fare application of air carriers.

Route charts are updated to allow the exercise of fifth freedom rights, when authorized by the aviation authorities of both countries.

The terms and conditions of carriage will be subject to the laws and regulations of both countries. Air carriers shall establish reasonable fares considering operational costs, reasonable profits, their business model and other air carriers’ fares.

The civil aeronautic authorities of both countries may conduct bilateral consultations, with the involvement of competition agencies, to avoid discriminatory prices and practices, protecting consumers from unreasonable high fares, and air carriers from state aid or the establishment of low fares to eliminate competition.

The protocol also establishes the possibility for air carriers to execute commercial cooperation agreements with air carriers of the same country, air carriers of the other country, or even with air carriers of third countries. This facilitates the operation and commercial cooperation of air carriers increasing their profitability.

Spain-Mexico air services agreement.

The president also sent to the senate for its consideration and approval, the air services agreement executed between Mexico and Spain on April 20, 2017.

The Mexico-Spain air services agreement allows the operation of first, second, third and fourth freedom rights, with the option of fifth freedom rights, prior approval of the civil aeronautic authorities of both countries. Cabotage is prohibited.

There will be no restriction as to the designation of air carriers to operate up to two air carriers for each city pair between Spain and Mexico, and up to four carriers between any city in Spain and Cancun. There will be no restrictions as to capacity, frequency and aircraft utilized by air carriers.

Each country has the prerogative to deny, revoke, suspend or limit operating permits of other party’s designated airlines, when they infringe other party’s laws and the air services agreement itself.

Blocked-space and code-share agreements are allowed between air carriers of the same country, of the other country, or even of third countries.

Air carriers shall establish reasonable fares considering operational costs, characteristics of service, passenger’s needs, reasonable profits, and other market information. Aeronautic and competition authorities may conduct consultations to protect passengers and air carriers.

Concerning operational safety, the parties agree to acknowledge the validity of each country’s airworthiness certificates, permits and licenses issued or validated by each country. A consultation process is established to uniform safety standards.

Consultations between the parties and arbitration are established to settle disputes derived from the application and interpretation of the agreement.

Switzerland-Mexico air services agreement.

Finally, the president sent to the senate for its consideration and approval the air service agreement executed between Mexico and Switzerland on November 4, 2016, that amends a prior bilateral agreement executed on June 2, 1966.

The new agreement is aimed at meeting the current needs on air connectivity between both countries and strengthen certain fields of the Mexican economy. The Switzerland-Mexico agreement follows the same model of the Spain- Mexico air services agreement as to traffic rights, air carriers’ designation, pricing setting, frequency and capacity, operational safety and settlement of disputes.