PANEL DISCUSSION: RECENT EVENTS IN THE WORLD OF AVIATION

Season 1, Episode 16 | November 19th , 2025

EXECUTIVE SUMMARY:

1. U.S.–Mexico DOT Crisis

   • DOT froze all growth from AICM/AIFA to the U.S. and may ban belly cargo — a major blow to Mexican carriers.

   • Root issues: AICM slot cuts, lack of transparency, relocation of freighters, and nonalignment with the bilateral.

   • Mexico City is losing hub relevance (now behind Bogotá; Panama likely next).

     
     

2. Aeroméxico Momentum

   • Court gives temporary relief to the Delta JV; critical for winter peak.

   • New long-haul routes (MTY–Paris, MEX–Barcelona) elevate global footprint to six EU destinations.

   • Strong dual-listing IPO; Delta commits 4 years with no divestment.

   • Aeroméxico remains a global leader in on-time performance.

     
     

3. Abra Group Expansion

   • Abra acquires Sky Airline; Sky becomes a subsidiary and maintains brand.

   • New CEO at Avianca (Gabriel Olivo) signals strategic realignment toward competing directly with LATAM.

     
     

4. Regional Disruptions

   • LATAM pilot strike affects >20,000 passengers, breaking a long record of labor stability.

   • U.S. cancellations spike: ~10,000 flights in six days due to FAA/TSA staffing issues; slow recovery underway.

     
     

5. Industry Outlook

   • Latin American aviation faces concurrent regulatory, labor, and operational shocks.

   • Winners will be carriers with strong alliances, diversified hubs, disciplined governance, and unified strategy.

TRANSCRIPT IN ENGLISH:

Welcome to Altitude. Fasten your seatbelts — we’re ready for takeoff. Let’s talk aviation seriously.

How’s it going, Arturo? How’s it going, Nico? Great to see you both again. I honestly thought I wasn’t going to make it with the insane traffic out there, but I’m glad we could all meet for a chat. And yes — great to be here sharing this coffee. I had forgotten how brutal traffic can be after being away for a while. Well, welcome back.

Welcome home, Nico.

Thanks — great to be back, my friend.

And it’s a good thing we’re meeting today, because right now in aviation, if you look away for even two days, everything changes three times. There’s a lot happening, and plenty to unpack. We’ve got the situation between Mexico and the U.S. DOT, which already feels like old news because new developments keep emerging every single day. Then we have the Aeroméxico–Delta issue and the judge’s ruling — we’ll get into that. The UPS accident in Louisville, Kentucky, which has the entire industry reviewing procedures. What else? The massive flight cancellations across the U.S. due to the government shutdown situation. And of course, Abra Group’s acquisition of Sky, which opens a very interesting window into where the region might be heading — something we actually talked about in our previous episode.

As you can see, today’s episode is packed — dynamic, wide-ranging, and with plenty of angles for analysis. So let’s dive in.

Nico, Fabricio — if you agree, I’ll start with the DOT issue.

Absolutely. And honestly, it’s good that we let some time pass, because the story was oversaturated in the media when it first came out. Now we can look at it with a bit more perspective.

Let’s go back to the basics. As I’ve said, it already feels like an old topic, but the U.S. Department of Transportation surprised everyone when it announced that, starting November 7, all flights from AIFA to the United States would be banned. Not only that — they also suspended already-approved routes, including some from Aeroméxico, and essentially froze any future growth from the entire Valley of Mexico. If you remember, a few months ago we discussed whether Mexico was at risk of falling back into Category 2. Honestly, this feels worse. What do you think?

Well, Category 2 is formally structured — it has clear technical criteria, a checklist, audits, and once you fix things, you’re back to Category 1. This, however, feels much more political. It impacts customers and airlines directly, with a level of unpredictability that Category 2 never had.

I actually disagree. In my view, we do know what Mexico needs to do: comply with the bilateral. If you study the bilateral agreement, there are several chapters Mexico simply hasn’t adhered to. So the solution is straightforward: align with the bilateral.

Sure, but fulfilling the bilateral has political layers — it’s not as simple as fixing a manual or training staff. There’s a much bigger backdrop at play. Regardless, you’re right that the biggest issue here is uncertainty. There’s no roadmap, unlike Category 2 where you know exactly what steps to take. Here, every day brings a new twist, and that’s extremely serious.

Let’s recap what the DOT’s prohibition actually includes:

– No airline can increase flights from the Valley of Mexico (AICM or AIFA) to the U.S.

– All flights planned from AIFA to the U.S. are either cancelled or no longer authorized.

Aeroméxico had to cancel its San Juan route. Viva Aerobus had a large U.S. holiday schedule planned — all blocked. Volaris also had a new route to Newark affected. That alone is already a major hit.

Add to that the looming possibility of prohibiting belly cargo — which would be a severe blow, especially for Aeroméxico — and the impact becomes enormous.

Aeroméxico also stopped operating AIFA–McAllen and AIFA–Houston. With McAllen gone, the city loses its direct Mexico service entirely. And that cancellation already took effect on November 7 — the last operation was that Thursday. It was a short, very successful route, now gone due to a government-to-government dispute that ultimately harms customers and airlines.

And think of Viva: all those booked passengers. Volaris with Newark. And if the belly-cargo ban materializes, the implications are massive for the entire industry.

Yesterday, Aeroméxico filed a formal response to the DOT regarding belly cargo. The DOT had given airlines 108 days before enforcing the ban — not a coincidence, since Mexico gave the same deadline to freighter operators to leave AICM. Aeroméxico’s document — which I only reviewed at a high level — is extremely well-structured, arguing why a ban would not only be unfair and inappropriate, but would also give U.S. carriers an outsized advantage since they operate at AICM and would not be subject to the restrictions.

There’s also a fascinating gap in the bilateral: when it was signed in 2015, AIFA didn’t exist. It wasn’t envisioned as a commercial airport — it was Santa Lucía Air Base. The entire agreement assumes Texcoco (the NAIM) as the future replacement for AICM. So, legally, AIFA has no defined status in the text. How do you enforce a treaty when one of its core pieces didn’t exist at the time?

Another important point: Toluca, Querétaro, Puebla, and Cuernavaca have the same rights under the bilateral as AICM. So the freeze on the “Valley of Mexico” affects them too. In strict legal terms, a Mexican airline might not be able to launch a new Querétaro–U.S. route under the current interpretation.

Now, from the DOT’s perspective, their core arguments are:

– Mexico reduced AICM slots from 63 to the mid-50s, then 43, now 44. This restricts U.S. airlines’ ability to grow.

– Mexico forced freighters to relocate to AIFA, complicating cargo connectivity.

– The original justification for slot cuts — protection-and-safety concerns — has not been accompanied by corrective works.

The logic is similar to a restaurant certified for 250 people that suddenly hosts 400; certification no longer applies. The issue is: was this ever formally presented to the DOT in a structured way? It appears not. The timing also coincided with efforts to push traffic to AIFA and even suggestions of introducing cabotage — so the sequence raises eyebrows.

Stepping back, globally airports want more flights, more passengers, more airlines. Here, the direction was the opposite. And the consequences are real: Mexico City has already lost its long-held leadership as Latin America’s top hub — Bogotá has surpassed it for two years, and Panama may overtake it next year.

The slot-cut measure was also labeled “temporary,” but temporary can mean six months or sixty years. Combined with the lack of transparency around slot allocation — and the partial adherence to global best practices — the DOT sees an uneven playing field and acts accordingly.

Speaking of AICM — and of course its key player, Aeroméxico — let’s talk about two major developments. First, the extension of the joint venture. That was big news. The judge’s decision this week allows Aeroméxico and Delta to continue operating while the courts review the merits of the DOT’s order. Under the original order, the alliance would have been forced to disconnect on January 1. The Court of Appeals essentially hit pause, giving them temporary relief.

And then the other major topic — Aeroméxico’s new route announcements. Nico, what can you tell us? And there’s also talk of a Monterrey–Paris route, right?

Yes. Aeroméxico announced Monterrey–Paris, and Mexico City–Barcelona, both perfectly timed for the World Cup — truly impeccable timing. These additions reinforce Aeroméxico’s evolution into a strong global airline. With Barcelona, they now have six direct destinations in Europe.

And as I understand it, they’re bringing in two additional 787-9 aircraft soon, right?

Yes — that’s what the press release said. And both routes, Monterrey–Paris and Mexico City–Barcelona, were announced as seasonal. We’ll see whether they eventually go year-round or rotate with Santiago, which is also seasonal. My guess is they’ll adjust depending on performance.

Either way, this puts Aeroméxico’s widebody operation in a category Mexico has never seen before: six European destinations, two in Asia, and a robust network across South America — all operated directly by the national flag carrier. It’s remarkable.

Now, on the legal front, I’m not entirely sure how the suspension of the DOT order works in detail, but at minimum it allows Aeroméxico and Delta to get through the high season — winter — without having to freeze or dismantle their joint operation on January 1. That alone is huge for Aeroméxico. They were in a real bind.

And Aeroméxico has more good news: the company went public last week with an offering that, from what I’ve read, exceeded expectations. They surpassed their equity placement goals, and they’re now trading on Wall Street as well — something analysts say brings additional confidence not just to the airline but to Mexico as a market. A very successful debut.

Truly historic — listed simultaneously in Mexico and the U.S., and with strong market reception. A big win for them.

And let me add two important points. First, Delta has committed not to divest for four years. That’s extraordinary — it guarantees stability and confirms Delta’s longterm vision. Delta, widely regarded as one of the world’s most admired airlines, and the largest by market capitalization, is reaffirming its partnership at a critical moment.

Second, Aeroméxico continues to rank among the most punctual airlines globally. They even painted a 787 with a message reading “World’s Leading On-Time Performer.” They’ve held that distinction for months — since February, at least. And punctuality is the number-one attribute customers value most.

So despite the regulatory turbulence we talked about earlier — DOT uncertainty, bilateral friction, court decisions — Aeroméxico is posting very positive news: strong punctuality metrics, a successful IPO, new routes, and fleet expansion.

And speaking of fleet, did you see the investment they announced in aircraft, systems, and processes? All aimed at elevating the customer experience. That’s encouraging — for investors, for customers, for the industry.

They need it, because domestically Viva and Volaris have been gaining ground. Aeroméxico knows this, and their strategy must include strengthening their domestic position and recovering share.

And that Monterrey–Paris route — I am almost sure it will become year-round. I hope it does. Then you have Mexico City–Barcelona, which also strategically positions them against Emirates on that same market.

Exactly — Barcelona puts them head-to-head with Emirates. And having a consistent schedule, with a strong widebody product, to six European destinations — again — that is unprecedented for Mexico. A true global airline profile.

And speaking of widebodies — let me shift topics for a moment, because we have a full agenda today. Arturo, you mentioned earlier the tragic UPS MD-11 accident. Can you walk us through what’s known so far?

From what we know — without speculating — the aircraft suffered a catastrophic failure in the left engine right after takeoff. The engine literally detached. There’s already an initial statement indicating that the entire pylon assembly separated — the structure that mounts the engine to the wing. This likely caused a fire on the wing and severe impact to electrical and hydraulic systems.

As you mentioned, these aircraft are old — around 30 years on average. The last MD-11 was built in 2001, so even the newest is about 24 or 25 years old. In aviation, an aircraft can be “old” as long as it’s properly maintained — but yes, this is an aging fleet.

Sadly, the three crewmembers died, and people on the ground were also killed — including at a Ford plant near the runway. A terrible tragedy. Following the accident, the FAA grounded all MD-11 freighters operated by UPS and FedEx, which are the two largest operators of that aircraft type. There are roughly 30–35 MD-11s still flying worldwide, most of them in the U.S. I imagine the remaining operators globally have also grounded theirs pending investigation.

Now we just have to wait for the official report — these investigations take time — to understand what exactly failed and why. Once we know more, we’ll discuss it in detail here on the podcast.

Changing gears a bit — since everything in this industry seems to be moving at once — let’s talk about what’s happening in South America. The big news this week was Abra Group’s announcement: the group behind Avianca is acquiring Sky Airline. There’s also a new CEO at Avianca. What are your thoughts? Because these weren’t moves we necessarily expected, yet they all happened within days.

Yes — in the last episode, remember? We talked about Colombia, about Abra’s structure, and about the issues that had stalled the Sky transaction. And we also mentioned Gol potentially opening a subsidiary in Chile — I can’t remember which of you brought that up.

But apparently none of that materialized, because what was announced — I think it was just the day before yesterday — is that Abra reached an agreement with Sky’s shareholders. Sky, which has been operating for many years in Chile and neighboring countries, will join Abra as a subsidiary. And in exchange, Sky’s shareholders will take a minority stake in Abra.

That’s exactly what I understood as well. Sky keeps its own identity — its own brand, its own board, its own management team.

And that positioning gives the broader Avianca–Abra ecosystem a much stronger footprint across South America. I also see it as a direct competitive move against LATAM, because it establishes presence in Chile, Argentina, Colombia, and beyond.

LATAM is extremely strong in those markets.

Here’s what I find interesting: along with the Sky integration announcement, Avianca also announced a leadership change. Gabriel Olivo — previously the head of Avianca’s cargo division — will take over as CEO in February. Federico Pereira is stepping down after several years in the role.

Strategically, it seems to me that Abra is aiming to go head-to-head with LATAM. In my view, Abra is evolving from a holding company into something closer to a centralized planning and strategy group — similar to IAG in Europe, or LATAM itself. The operational subsidiaries remain in place in different countries, but core strategy becomes unified.

Over time — and this is just speculation — Abra could move toward a single brand to avoid the complexity of juggling Avianca, Gol, Sky, and even Wamos, the Spanish capacity provider they’re working with.

Well, it depends. In Europe, IAG works perfectly well with multiple brands — Iberia, British Airways, Aer Lingus, Vueling, Level — each with its own market position. The Air France–KLM Group works the same way and is now planning to integrate SAS under that model as well. One group, one strategic leadership team, multiple operating airlines with their own CEOs.

True — but Latin America isn’t Europe. And unlike IAG, there’s already a working example of a single-brand regional group: LATAM. LATAM’s loyalty program, brand identity, product offering, and customer experience are unified across all its AOCs and subsidiaries. Customers don’t need to interpret multiple brands — it’s one value proposition.

Air France–KLM has a single loyalty program too, but the brand identities remain separate.

Right — but the customer-facing experience is coherent. The question is whether Abra wants passengers to view flying Sky, Gol, or Avianca as interchangeable. That’s far easier with a single unified brand.

Speaking of the region, did you see the LATAM pilots’ strike? They halted operations — I’m not sure how it was resolved, but it definitely happened. LATAM had always been extremely stable on the labor front, so it surprised me that they didn’t reach an agreement before disrupting operations.

Yes, it affected Chile in particular. They had to reschedule flights and there were impacts across other countries as well, since LATAM often reallocates aircraft between Chile, Colombia, and Peru depending on operational needs. I read that the strike affected at least 20,000 passengers on day one.

And it really stood out because LATAM historically hasn’t suffered major labor disruptions. Avianca had had major labor challenges in the past — we discussed those in the previous episode — but LATAM had maintained continuity.

And speaking of disruptions, what happened in the U.S. with the mass cancellations? It was chaos. When we used to manage operations at Mexicana and Aeroméxico, handling disruptions was complicated enough. Now imagine U.S. mega-carriers being forced to cancel thousands of flights due to the budget standoff and staffing shortages — especially among air traffic controllers.

It wasn’t just ATC — TSA lines were insane. I’ve never seen anything like that. In Houston, lines went out to the street — four or five hours just to clear security. In Philadelphia, two screening checkpoints were completely closed due to lack of staff.

Based on what I’ve read, the FAA issued a directive due to absenteeism and overall degradation of air traffic operations. They began with a 2–3% daily reduction in flights starting November 7 and planned to increase gradually to about 10%.

And with Thanksgiving around the corner — the most critical travel period for U.S. airlines — tensions were sky-high. Thankfully, the political budget deal was reached in time, so the worst-case scenario was avoided. But operationally, it will still take days to stabilize.

Exactly. Ed Bastian, Delta’s CEO, said operations would normalize faster than people expect — and that’s good news. But still, consider this: from November 7 to November 12 alone, nearly 10,000 flights were canceled — according to Airlines for America. For comparison, from August 15 to November 6 — almost three months — there had been 12,900 cancellations. Imagine: 9,700 canceled flights in six days versus 12,900 in three months. The scale is unprecedented.

The good news is that cancellations are already decreasing. Yesterday there were about 1,200; today around 800. It’s trending the right direction. But stabilization is gradual — crews need repositioning, aircraft need reassignments, passengers need reaccommodation. It’s an enormous logistical puzzle.

And imagine the ripple effects — the day with 2,800 cancellations, I think it was November 9. The number of missed connections must have been enormous. Even though these were mostly domestic cancellations, the global impact was immediate. A passenger flying Miami–Atlanta to connect to Tokyo suddenly doesn’t leave Miami.

Exactly — that person is still sitting in Miami.

Well, I think that’s a good place to wrap for today. We covered a lot: the DOT issue, the Aeroméxico–Delta joint venture ruling, the UPS accident, the U.S. operational meltdown, Abra’s acquisition of Sky, Aeroméxico’s new routes — everything is moving incredibly fast, and there will certainly be more to analyze in the coming days.

Absolutely. This industry never stops — new developments every day, across strategy, regulation, operations, and competitive positioning. A really rich conversation today — and the trends we’re seeing will define the region’s aviation landscape.

Welcome back, Nico — and we’ll see you all in the next episode. Until next time — thanks for listening and for flying with Altitude. Follow us on social media and visit our website at www.AltitudeAviationLeaders.com.mx. We’ll see you on our next flight.