Mexico - Commercial Guide
Aerospace

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2020-08-17

Aerospace

Aerospace has been a major focus in Mexican economic development, both as an industrial sector and in connection with commercial, private, and defense aviation growth. All these factors combine to make aerospace a key part of our priority sector strategy and a best prospect industry sector for Mexico.

Overview

The following table provides the most recent statistics for the aerospace industry in Mexico. Please note that these figures include aviation products and services, as well as military-related purchases, but they do not include airport construction products and services.

Mexico Aerospace Industry Market Size
(Figures in USD billions)

 

2017

2018

2019

2020 (Estimated)

Total Local Production

3.0

3.1

2.9

2.0

Total Exports

3.8

5.5

4.5

3.6

Total Imports

3.4

3.

2.2

2.2

Imports from the U.S.

2.2

2.4

2.5

1.9

Total Market Size*

2.6

2.8

.6

.6

Exchange Rates

18.91

19.22

19.26

20.00

*Total market size = [(total local production + imports) – exports]
Note that 2018–2019 reductions in the value of the Mexican Peso mask growth in these numbers.
Source: Global Trade Atlas 2020

The aerospace industry is relatively young in Mexico, but its roots are deep. In the State of Baja California, for example, one firm has been in the market more than 60 years, and aerospace is one of its leading business divisions. Mexico’s aerospace industry is an excellent example of growth, foreign investment attraction, and job creation. Based on the most recent available official figures from the Mexican Aerospace Industry Federation (Federación Mexicana de la Industria Aerospacial or FEMIA), 14 percent average annual export growth 2004–2019, 63,000 plus jobs created, and up to USD 6 billion in accumulated direct foreign investment (2007–2017). Moreover, global demand for new aircraft and maintenance services—and growing air passenger flows worldwide—has supported a positive future for the industry. We anticipate disruptions and adjustments in 2020 and 2021 due to the COVID-19 emergency, with a gradual return to the sector’s vibrancy as the pandemic subsides.

Aerospace Supply Chains and Production

Mexico’s aerospace sector grew from 100 manufacturing firms and organizations in 2004 to 360 by mid-2019, according to FEMIA estimates. Today these firms primarily include maintenance-repair-overhaul facilities (MROs), technical schools, research centers, and universities, as well as related service providers. In general terms, 72.2 percent of all firms are manufacturers, 13.2 percent focus on design and engineering, 11.2 percent are in MRO services, and 3.4 percent are other support entities. FEMIA estimated in 2019 that foreign direct investment by country of origin was 48 percent from the United States and 36 percent from Canada.

Various developments contributed to this recent explosive growth, from the 2004 arrival of the Canadian aerospace firm Bombardier to various government programs including business incentives, workforce training programs, and new universities. However, the sector's growth goes back to the late sixties when the Mexican Government’s Maquiladora Export Program triggered expanding industrialization, employment, and regional development. The Maquiladora Program allows the duty-free importation of goods to assemble products for export. Aerospace firms moved to new industrial parks in northern border cities to take advantage of ‘maquila’ cost savings and efficiencies. These parks evolved into diversified aerospace clusters. Companies with a long-term presence include Rockwell Collins (1969, now Collins Aerospace), Safran Group (1991), Labinal (1996/now Safran Labinal), and Beechcraft (2007).

The sector is divided into original equipment manufacturers (OEMs, producing final aircraft), followed by companies involved in Tier 1 production (principal aircraft systems), Tier 2 (producers of sub-assemblies), and Tier 3 (parts and supplies). In contrast with the United States, the Mexican aerospace industry focuses on aerospace parts and assemblies that are integrated into final systems. In the space arena, the Mexican Space Agency (Agencia Espacial Mexicana or AEM) has led projects with academia to produce mini nanosatellites and other projects with NASA.

The Mexican aerospace industry has five main hubs, located in the states of Baja California (Tijuana-Mexicali), Sonora, Chihuahua, Querétaro, and Nuevo León. Baja California is the largest, with 110 aerospace firms supporting more than 35,000 direct jobs.

Mexico has improved its aerospace manufacturing capabilities, moving from production of components, small parts, and harnesses, to manufacturing of airframes, flight surfaces, small drones, and flight control and avionic assemblies. Among the multinationals, GE and Rolls Royce produce new turbine systems in Mexico, Fokker Aerostructures manufactures wings for jets, and Safran Group—with 10 facilities in the country and seven in the State of Querétaro—manufactures landing systems, engine parts, jet engine components, and jet housings.

Some local firms have obtained global certifications that allow them to diversify their manufacturing processes to production of small unmanned aerial vehicles (UAVs) and light aircraft projects. For instance, Aernnova produces airframe and flight structures. Light aircraft prototypes have also been developed, such as the sport model produced by the Mexican firm Horizontec/CENTA, and light attack planes for military training and acrobatics, made by the local company Oaxaca Aerospace. In the long-term, the Mexican Government and domestic industry hope to produce medium and large commercial aircraft.

Regulatory Harmonization and Sector Development

Regulatory harmonization has advanced in recent years. The 2012 Bilateral Aviation Safety Agreement (BASA) has achieved mutual recognition of aerospace standards between the United States and Mexico, such as the National Aerospace and Defense Contractors Accreditation Program (NADCAP) and the AS9100 aerospace quality management system, as well as certifications from the U.S. Federal Aviation Administration (FAA) and its Mexican counterpart, the Federal Agency of Civil Aviation (Agencia Federal de Aviación Civil or AFAC). Note that in 2019 AFAC replaced the agency previously named DGAC. Altogether, these developments have facilitated growth of manufacturing operations in the North American region. In addition, Mexico’s accession to the Wassenaar Arrangement (2012) provides regulations to effectively control the exportation of sensitive dual-use aerospace products and materials.

In 2012, the Mexican Secretariat of Economy (SE) introduced the Aerospace Industry National Strategic Program 2012–2020, called Pro-Aéreo. It dubbed its 2017 updated plan Pro-Aero 2.0. The program has sought to elevate Mexico to the top 10 list of global aerospace suppliers by 2020 by attracting more small and medium-sized firms. The program still appears in Mexican government websites, though a restructuring of the program may take place shortly.

Aviation Growth

Mexico’s rapid aviation growth further boosted the aerospace industry. Mexican commercial aviation and related demand for maintenance, repair, and overhaul (MRO) has been driven by several factors, including the expansion of low-cost carriers such as Volaris and Interjet, the 2016 approval of the Delta-Aeromexico partnership, the 2015 conclusion of the U.S.-Mexico Bilateral Air Transport (“Open Skies”) Agreement, and increased use of Mexico as a regional hub. The Open Skies agreement eliminated restrictions on routes between the two countries, allowing passenger airlines and all-cargo carriers to serve any combination of city pairs in the United States and Mexico. In addition, it allows cargo carriers to begin or end routes outside the two countries. Another profound change in the aviation industry has been the growth of low-cost airlines vis-a-vis traditional airlines.

From 2016 to 2019, Volaris, Viva Aerobus, and Interjet invested in new assets and modernized their fleets, absorbing a good portion of market share from the traditional dominant airline, Aeromexico. Airline passenger flows reported by AFAC show an annual average growth of nearly 10 percent 2015–2017. In 2018, national and international passenger volume grew 5.5 percent, from 90.5 million in 2017 to 97.3 million in 2018. AFAC has not yet published 2019 figures. However, the travel disruptions of the COVID-19 pandemic have devastated the aviation industry. Mexican airlines lost more than 90 percent of March-April 2020 passenger volume over 2019 monthly averages. The International Air Transport Association (IATA) stated that passenger global demand fell 52.9 percent in March 2020. Aeromexico and Interjet have both sought bankruptcy protection.

Mexican aviation growth uncertainties began when the López Obrador Administration cancelled construction of the Mexico City New International Airport (NAIM). The President rejected the notion of Mexico City as a Latin America hub and ordered construction of a new Metropolitan Airport System (SAM) with expansion of the Toluca International Airport, the current Benito Juárez Mexico City International Airport, and creation of an international airport named “Felipe Angeles” at the Santa Lucia Military Air Base in the  State of Mexico. (Further information on the current Administration’s new plans for an airport system for the Valley of Mexico is available in our Transportation Infrastructure section.) The country has a network of 77 airports, of which 64 are international commercial airports, among a total of 1,424 airfields including military bases and small private airports. The international commercial airports are operated by private-sector companies with long-term concession agreements and others are managed directly by the government through the ASA agency described below. It is estimated that in 2019, the top five airports by passenger volume were Mexico City (50.3 million), Cancún (25.5 million), Guadalajara (14.8 million), Monterrey (11.1 million), and Tijuana (8.9 million). Some of the larger groups operating the international commercial airports include the following:

  • Grupo Aeroportuario del Centro Norte (OMA) manages 13 airports in northern and central Mexico that handled 23.1 million passengers in 2019. Improvement projects are taking place for the period 2016–2020, mainly for the Monterrey, Culiacán, and Acapulco airports.
  • Grupo Aeroportuario del Pacífico (GAP) manages 12 Pacific coast airports handling 48.2 million passengers in 2018 (more recent figures unavailable). In 2019, GAP airports with the most passengers were Guadalajara, Tijuana, and Los Cabos.
  • Grupo Aeroportuario del Sureste (ASUR) manages nine airports in the Gulf of Mexico and southern Mexico, and one international airport in San Juan, Puerto Rico. Nationally it served 34 million passengers in 2019. In 2019–2023 ASUR continues infrastructure investment in Cancun, Merida, and Oaxaca airports.
  • Aeropuertos y Servicios Auxiliares (ASA) is a government agency that operates 19 airports, co-operates five additional airports, and supplies fuel to 63 airports. The additional five airports it co-operates include Toluca, Querétaro, Cuernavaca, Palenque, and Tuxtla Gutiérrez. ASA airports handled 3.4 million passengers in 2019.
  • The Benito Juárez Airport is known in Spanish as Aeropuerto Internacional de la Ciudad de México (AICM) and is one of the largest in the world, logging 50.3 million passengers in 2019. AICM operates under a concession structured as a majority state participation company with the name of Grupo Aeroportuario de la Ciudad de México, S.A. de C.V. (GACM). The Transportation Infrastructure section of this guide describes the López Obrador administration’s plan for the new Metropolitan Airport System (SAM) that includes the current AICM, Toluca, and “Felipe Angeles” Santa Lucía international airports.

The Space Program

The Mexican space program is a further consideration for aerospace suppliers. The space program is managed by the Mexican Space Agency (Agencia Espacial Mexicana or AEM). The AEM, in its current form, was established in 2010 with specific, modest goals. Its efforts to expand the country’s satellite network for communications, space science development, environmental modeling, and surveillance have generated opportunities for U.S.-produced space systems and suppliers. AEM has several cooperation agreements with NASA on space education, and with international space agencies. It has managed a nanosatellite program with local educational institutions and academia to motivate new programs among space professionals. In 2017, the AEM, the Secretariat of Economy (SE), and ProMexico published the Orbit Plan 2.0 (Plan de Orbita 2.0), a strategic space sector development program outlining niche opportunities and recommendations on specific space projects. It appears the program has continued in the López Obrador Administration.

Leading Sub-Sectors

Leading sub-sectors for aerospace opportunities in Mexico include supplying manufacturing and assembly plants, the entire aviation ecosystem, and the defense sector.

Despite the rapid growth of Mexico’s aerospace industry—or perhaps because of it—the mix of local Tier 2 and Tier 3 suppliers is still lacking. Large OEMs are unable to find specialized, fully certified local suppliers with advanced capabilities and with sufficient logistics capabilities. This fact, combined with evolving government regulations supporting supply chain growth, creates sales opportunities across Tier 2 and 3 suppliers.

In terms of supply chains, FEMIA estimated in 2016–2017 that Boeing had 26 Mexican suppliers, Airbus had 36, and Embraer 13. Large aerospace OEMs continue looking to expand their supply chain in Mexico to support global business continuity and establish middle- and long-term production programs. Other aerospace firms need partners to reach growth, project size, and investment targets.

Recently, research centers have been created to support R&D, not only for new turbines, motors, and components, but also to drive technological solutions for other complex systems, software, and engineering applications in manufacturing processes. In early 2018, the Center of Aeronautical Technologies of Querétaro (Centro Nacional de Tecnologías Aeronauticas or CENTA) was inaugurated with the support of the National Council of Science and Technology (Consejo Nacional de Ciencia y Tecnología or CONACYT). It provides services for the aerospace industry and supports new projects led by small and medium firms. In mid-2017, the Spanish company Indra opened a new Center of Technological Development in the State of Querétaro to increase offerings for transportation, infrastructure, energy, and other industrial sectors. Since mid-2019, aerospace firms in Tijuana have a new innovation and design center supported by the Mexican Confederation of Industrial Chambers (Confederación de Cámaras Industriales or CONCAMIN) and the Mexico-France Chamber of Commerce.

These opportunities go hand-in-hand with growth of the aviation sector, where we see demand for flight and maintenance training, parts and maintenance services, airport needs, and a variety of aircraft including both fixed-wing and helicopters.

Opportunities

The U.S. Commercial Service Mexico is happy to assist you in exploring market opportunities, particularly in the following sub-sectors.

Supply Chain Opportunities

Some of the best prospects for products and services in the aerospace industry are:

  • Thermal and hydro forming
  • Surface treatments
  • Nitro-carburized materials and nitrocarburizing
  • Motors and rotors
  • Testing equipment
  • Special composites and processes
  • Metal treatments
  • Aerospace molding
  • Special tooling
  • Advanced composites
  • Specialized aerospace services

Aviation Sector Opportunities

The growth of Mexican aviation may generate additional opportunities in and around airports:

  • MRO services and maintenance programs
  • Airport construction (see the Transportation Infrastructure section)
  • Aircraft and helicopter flight training and MRO
  • Aircraft supply and provisioning services
  • Airport equipment, supply, provisioning, and concessions
  • Small aircraft, executive aircraft, and helicopter sales, parts, and services

Defense Sector Opportunities

Another area of potential business opportunity is in defense aerospace. The Mexican National Defense Secretariat (Secretaría de la Defensa Nacional or SEDENA), which includes both the Army and the Air Force, and the Secretariat of the Navy (Secretaría de la Marina or SEMAR), received 2020 budgets of around USD 4.8 billion and USD 1 billion, respectively. Both SEDENA and SEMAR have growing R&D and manufacturing programs. We foresee supply opportunities for manufacturing radars, cannon prototypes, two-seater airplanes, experimental training airplanes, air-to-surface missiles, and launchers for military aircraft. In addition, we have identified military spending needs that include the following:

  • Aerial surveillance systems
  • C-295 airplanes for military transport
  • Helicopters for high impact operations
  • Tactical operations assets
  • Cargo and personnel transport helicopters and airplanes
  • Systems and equipment for maritime surveillance

Web Resources

Mexican Secretariat of Communications and Transportation (SCT)

www.gob.mx/sct

Mexican Secretariat of National Defense (SEDENA)

www.gob.mx/sedena

National Institute of Statistics and Geography (INEGI)

www.inegi.org.mx

Mexican Federation of the Aerospace Industry (FEMIA)

www.femia.com.mx

Mexican Space Agency (AEM)

www.gob.mx/aem

Mexico Now (magazine)

www.mexico-now.com

JetsNews (Aerospace supplements)

www.jetnews.com.mx

Vuela Magazine

www.vuela.com.mx

Revista Manufactura

https://manufactura.mx

Events

To explore these market niches and develop essential contacts, we recommend two activities. First, organize site visits to Mexican aerospace hubs and meetings with companies directly involved with the industry. Second, attend one or more of the upcoming commercial events in the sector. In some, the Commercial Service Mexico will participate:

  • Mexico Aerospace Summit 2020  October 27-28, 2020, Querétaro Congress Center, Querétaro City, Querétaro
  • Engine Forum Sonora 2020, November 13-14, 2020, Expo Forum Hermosillo, Hermosillo, Sonora
  • FAMEX 2021, April 21–24, 2021, U.S. Pavilion, Queretaro Intercontinental Airport, Querétaro, Mexico

Contacts

For more information on the aerospace sector in Mexico, please contact:

Silvia I. Cárdenas

Commercial Specialist

U.S. Commercial Service—Mexico City

Tel: +52 (55) 5080-2000 ext. 5209

Silvia.Cardenas@trade.gov