WORKING SESSION RECAP SEASON 1

Season 1, Episode 18 | December 17, 2025

Altitude – Season 1 | Episode 18 Executive Summary

• Mexico remains structurally constrained: Capacity limits at AICM, unresolved AICM–AIFA strategy, and restrictions on U.S. flying and cargo are capping growth and putting Mexico’s regional hub position at risk.

• Regulatory credibility under pressure: Temporary authorization of foreign-crewed wet leases (Volaris/Viva) solves short-term capacity gaps but sets a dangerous precedent for rule-of-law, labor relations, and long-term policy coherence.

• Labor tensions are returning globally: Post-pandemic recovery has slowed the restoration of pay and benefits, leading to more frequent labor friction (e.g., LATAM Chile, Spirit). Consolidation (Abra) increases cross-comparison among pilot groups, raising negotiation risk.

• Disruption management is now a core product: Weather, drones, geopolitics, and staffing shortages make resilience and recovery central to the customer journey, not just operational hygiene. Technology will be decisive.

• Fleet strategy is reshaping networks: Long-range narrowbodies and ultra-long-haul missions are redesigning route economics, while OEM delivery reliability and credibility (Airbus vs. Boeing) have become strategic risks.

• Operational discipline proved effective: The A320 software event showed that fast, coordinated industry response can contain systemic risk—an important benchmark for future crises.

• Bottom line: Growth continues in Latin America, but unevenly. Mexico is underperforming due to policy and infrastructure constraints, while industry leaders must manage regulatory risk, labor volatility, and operational resilience heading into 2026.

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Transcript in English

Welcome to Altitude. Fasten your seatbelts — we are about to take off. This is where we talk about aviation seriously.

Hello everyone, it’s a pleasure to be with you once again in a new episode of Altitude.

Fabricio, Arturo — given the time of year in which we’re releasing this episode, it feels like a natural moment for reflection. Year-end is always a period for taking stock: looking at what we’ve done, and thinking about where we’re headed next. And I believe Altitude should do the same.

We’ve now been on the air for seven months. It’s been an extraordinary journey: we’ve covered a wide range of topics and reached a broad and engaged audience. I’m curious to hear your thoughts on how this period has unfolded.

First of all, Nico, great to be here again — and I think this idea of doing a recap of the themes we’ve covered throughout the year is an excellent one. Walking through them step by step during this conversation makes a lot of sense.

Absolutely. Thank you to everyone who’s joining us once again. Seven months really have flown by — and in reality, it’s already been more than a year since we first sat down to imagine what Altitude could become and to build it the way we like to do things: seriously and professionally.

Time has passed quickly. We’re already at 17 or 18 episodes — I’ve lost count. And with this episode, number 18, we officially close the season.

We’ve addressed a wide range of topics. But before we move into a full recap of Season One, I’d like to suggest we start with three or four current issues that, at the moment we’re recording, are generating significant debate across the industry.

I’d like to begin with the recent issue surrounding Volaris leasing aircraft from foreign operators. Arturo, since this is a topic you follow closely, how do you see it?

It’s a major issue. Traditionally — and more importantly, legally — any aircraft operating domestic routes under the Mexican flag must be operated by Mexican airlines and, therefore, flown by Mexican flight crews.

Some time ago, Viva was granted authorization — supposedly for a very short period — to lease six to eight aircraft along with their foreign pilots and cabin crews to operate domestic flights within Mexico. Frankly, this was unprecedented.

Now we’re seeing Volaris doing the same thing, again allegedly for a very limited period. We’ll see how that unfolds, especially since the Mexican pilots’ union, ASPA, has already raised concerns — just as it did in the Viva case. At the time, those objections had little impact.

If the authorization was granted to Viva, it was predictable — and arguably equitable — that it would also be granted to Volaris. However, from a public policy standpoint, this clearly contradicts Mexico’s aeronautical framework. You cannot break the law simply to address technical or operational challenges.

And when I refer to “technical challenges,” I’m talking about the engine issues affecting both Volaris and Viva. A significant portion of their fleets has been grounded due to mandatory engine inspections and maintenance. Despite this, both airlines continued selling capacity as if those aircraft would be available — and now they aren’t.

The solution? Bring in foreign aircraft, foreign pilots, and foreign cabin crews to operate the flights that were already sold, in order to avoid passenger disruption. It’s extremely controversial. I’m curious to hear how you both see it.

If you allow me to put on my network-planning hat — the same one you’ve worn many times, Arturo — when you build a capacity plan and publish schedules, especially at airlines like Viva and Volaris, you’re doing so nearly a year in advance. What you need is aircraft — metal — to operate those schedules and avoid major disruptions.

As you mentioned, Arturo, you ask your fleet and legal teams to source aircraft that can be operated within the current regulatory framework. But we’re in an unprecedented environment. There are hundreds of aircraft still grounded globally.

In Volaris’ most recent quarterly earnings call, management openly stated that they expect the engine crisis — and the resulting aircraft groundings — to persist through 2027.

There are simply no aircraft available in the leasing market. If you approach a major lessor today asking for short-term lift, the answer is straightforward: there is nothing available. Everyone is responding to this crisis however they can, and the few aircraft that do exist are extremely expensive.

So if an operator offers a solution — “I’ll provide the aircraft, but it comes with its own crew” — and the Mexican Civil Aviation Authority (AFAC) authorizes it, I can understand why airlines would accept it. I fully respect the opposing views and the sensitivity of the issue, but if the regulator approves it, the airline will operate those aircraft.

The real question, in my view, is why AFAC is authorizing it. If tomorrow I were authorized to drive through the city ignoring traffic lights, I would probably do it — the responsibility lies with the authority that granted the permission. The government’s role is to ensure that aviation law is fully respected, and what is being authorized is explicitly prohibited under current legislation.

That’s where the issue truly lies.

Some have even suggested that this could be interpreted as cabotage. Personally, I don’t see it that way. The flights are still being operated commercially by Mexican airlines — Viva and Volaris — even if the aircraft are registered in Malta or Lithuania and flown by foreign crews.

For me, cabotage would be, for example, if American Airlines suddenly began operating Mexico City–Guadalajara. That’s not what’s happening here. The economic and commercial interest remains with the Mexican carriers.

My concern is elsewhere: where are the Mexican pilots and cabin crew? Their aircraft are grounded, and those flights are now being operated by foreign crews instead.

To my knowledge, there have been no mass layoffs of pilots or cabin crew at Viva or Volaris — and that makes sense. It’s extremely costly to lose trained crew and then have to rehire them later. They will continue paying base salaries. But we must remember that a significant portion of pilot and cabin crew compensation is variable. So while Mexican crews earn only their base pay, foreign crews operating these flights receive their full compensation.

And then the authority steps in and says, elegantly, “We’re allowing this in the national interest.” In other words: we’re breaking the law for operational convenience.

There’s also another argument being raised — that if this situation continues, even under the label of “temporary,” growth opportunities will be captured by foreign aircraft and foreign crews, ultimately reducing future hiring of Mexican pilots. That concern is very real.

To exaggerate the point: imagine tomorrow foreign operators showing up to run Mexico City’s metro system because of a technical shortage. The public outcry would be immediate. Yet in aviation, it’s being allowed — and I truly don’t understand why.

Let me add two brief historical points. First, this issue has many layers and is extremely sensitive.

Years ago — and I think you were there as well, Arturo, when we were at Mexicana — we leased a DC-8 freighter from Southern Air Transport under a wet-lease arrangement. The operation involved Mexico, Guadalajara, Miami, and Central America. That operation was eventually shut down because the wet lease was interpreted strictly as temporary, and the aircraft — along with its crew — had to be returned after only a few months.

At the time, ASPA was an exceptionally powerful union, representing both Mexicana and Aeroméxico. If ASPA stopped, the entire country’s aviation system stopped. That leverage no longer exists today. The unions simply don’t have the political or operational strength they once did — and that makes it far more difficult to prevent situations that, in my view, remain clearly illegal.

A fascinating and deeply complex issue

This actually gives us a natural transition to a topic Nico raised two episodes ago — the unexpected pilot strike at LATAM in Chile. Nico, what has happened since then?

At the time we discussed it, information was still limited. Since that episode aired, the situation evolved further. The strike continued and resulted in a temporary shutdown of LATAM Chile’s operations — exclusively in Chile.

If I recall correctly, up to 20,000 passengers were affected, representing roughly 1.5% to 2% of LATAM’s total operations. The disruption was significant. However, LATAM and the Chile-based pilots eventually reached an agreement, and by late November, it took approximately three to four days to fully stabilize operations.

It was a very intense event that clearly impacted passengers and the broader aviation system LATAM serves — particularly because, as we mentioned at the time, this type of labor disruption had been relatively uncommon given the historical stability in that relationship. The positive takeaway is that it was ultimately resolved.

This also brings to mind what we’ve seen with Spirit Airlines in the United States, which entered Chapter 11 twice in a very short period. That process led to significant pilot furloughs and even salary reductions of around 8%.

So we’re clearly experiencing turbulence on multiple fronts: Mexico, South America, and the United States. Arturo, since you closely follow crew-related issues, how do you see the broader landscape? Do you expect we’ll continue to see these kinds of tensions in the coming months?

If you’re referring to broader labor tensions between airlines and their crews, especially flight crews — absolutely, yes.

Crew groups are coming off the pandemic, a period during which they made significant and, at the time, entirely reasonable concessions. Since then, as the industry has moved into recovery, the traditional cycle of collective bargaining — which historically produced steady year-over-year improvements in compensation and benefits — has changed.

Airlines are recovering, but that recovery has been uneven and slower than many expected. As a result, the restoration of wages and benefits has been delayed across the globe, and that inevitably creates tension. Shorter tempers, less patience.

I don’t think labor unrest will become the norm — but I do believe we will see it more frequently than we did pre-pandemic, and not only in Latin America. Europe as well.

Europe has enjoyed a relative period of calm recently, but we all remember the extensive strikes at Air France, Lufthansa, and others just a few years ago. That pressure hasn’t disappeared — it’s simply dormant. When the next negotiation cycles begin, these issues will resurface.

This is something we’ll need to monitor closely, because when it happens, it can put entire regional aviation systems under stress.

And that naturally brings us to the Abra Group. With the integration of SKY, on top of Avianca, GOL, and Wamos, at what point do pilot groups — if not formal unions, then at least the pilot communities themselves — begin talking to one another, comparing labor conditions?

One group may have advantages over another. Someone inevitably asks: Why do pilots in Colombia have this, but pilots in Brazil don’t? We’ve seen this before. When Mexicana was part of Star Alliance — and later when Aeroméxico joined SkyTeam — communication among pilot groups increased significantly.

That kind of interaction can be extremely positive: best practices, higher standards, knowledge transfer. But it can also generate tension, especially when crews are flying the same aircraft types under very different contractual conditions.

That’s absolutely right. In SkyTeam, for example, pilot unions even have formal forums where they meet and openly compare conditions. So I fully agree with your point.

But given the time of year, I think this is a good moment to step back and recap Season One — this first chapter in the Altitude story.

We’ve covered broad, foundational industry topics. We discussed airline financial results. We examined alliances — what they are, how they work. And remember, Fabricio, we even went to the Paris Air Show, producing an episode that wasn’t just about the event itself, but about what we observed: industry trends, strategic direction, and where the market is heading.

I’d like to ask you both — especially since you focus so much on numbers, results, and even forecasts with the proverbial crystal ball — to reflect briefly:

How did you see the industry seven months ago, and how do you see it today?

Let’s talk about overall performance — Mexico, and of course Latin America. How much of what we expected actually materialized?

I’ll start from a global perspective, as I usually do. Broadly speaking, much of what we anticipated has played out — particularly for the summer season, the first half of the second semester, and the year-end period.

Airline results are holding up, but they’re not accelerating as much as initially expected. Growth hasn’t stalled, but it has moderated, largely due to external factors that are reshaping the operating environment.

We’ve already mentioned LATAM. In the U.S., we’ve seen flight cancellations linked to federal budget negotiations. In Europe, airport constraints tied to sustainability and noise restrictions continue — Amsterdam and KLM being a prime example.

Latin America is experiencing similar dynamics. Fabricio, maybe you can give us a concise regional view.

Thanks, Nico. Despite a challenging macroeconomic backdrop, Latin American aviation continues to move forward with steady momentum.

We’ve seen fleet growth across the region — Avianca’s massive order book, now exceeding 130 Airbus aircraft pending delivery; LATAM announcing new European routes; Aeroméxico expanding transatlantic service with destinations like Barcelona and Paris from Monterrey; and strong growth in U.S.–Europe connectivity for the upcoming season.

So while growth rates may not be spectacular, the direction of travel is clearly positive. Once the current uncertainty and global tensions ease, this sets the stage for more favorable industry conditions.

That said — and without being alarmist — Mexico remains the weak spot. In 2024, the Mexican market has essentially stagnated, with total growth below 1% year-to-date. As of the third quarter, domestic traffic growth stood below 3%, and we may close the year at around 3% year-over-year.

That’s modest at best — and far below historical norms. In 2013, for example, Mexico grew at 11%. While post-COVID comparisons are imperfect, the reality is that we’ve gone from double-digit growth to roughly 2% in just two years.

Capacity reductions at Mexico City, grounded aircraft, DOT sanctions, and — importantly — 29 months under Category 2, which only ended two years ago, continue to weigh heavily on the market.

We hope 2026 brings better news.

And that’s critical, because Mexico’s potential should not be eroding. Mexico City was historically the largest aviation market in the region. It’s now second, behind Bogotá, and uncomfortably close to Panama.

If this trend continues, we risk falling to third or fourth place, especially as airports like Lima receive significant investment and operate under clear medium- and long-term business plans.

Exactly. As we discussed in the previous episode, Mexico remains stuck in the AICM–AIFA stalemate, with no clear short- or medium-term solution.

Operationally, we also addressed the concern that Mexico might fall back into Category 2. That hasn’t happened. However, something potentially just as damaging — or worse — has emerged: restrictions on increasing U.S. flights from AICM, a prohibition on U.S. operations from AIFA, and severe limitations on air cargo, including belly cargo.

If these measures are fully implemented — despite ongoing negotiations — the impact will be very significant

We also produced an episode on crew fatigue and mental health, largely framed around the early signals and questions raised by the Air India incident. At this stage, however, we cannot add much beyond what is publicly available. The only material released so far is a brief preliminary report, which is limited in detail. It may leave open the possibility of a mental-health component involving members of the crew, but it does not establish that conclusion. And as we’ve said consistently on Altitude, we do not speculate — which means we cannot confirm or deny anything until the final findings are available.

On the broader security front, we reflected on major contingencies such as 9/11. Fortunately, in recent years — and really over the last decades — the industry has not faced aviation terrorist attacks of that scale. In that sense, it has been a relatively “clean” year.

We also spent time on operational disruption — including incidents in Europe at airports such as Brussels and Berlin, and more recent events as well. We continue to see drone-related disruptions affecting airport operations. I don’t recall the most recent airport involved, but the risk remains very real.

And while the situation between Russia and Ukraine remains unresolved, and broader geopolitical instability continues, that disruption risk will stay elevated.

The industry in that region must continue preparing and improving its ability to respond — always with a clear objective: minimize the impact on customers.

That links directly to the episode we did on the customer journey. A key point is that parts of the customer journey are, at times, outside the control of airlines and airports. Exogenous shocks hit the entire service chain — and even the most precise operational planning can be undermined by disruption.

But customer journey management is also about how you recover: how you stabilize operations, how you deliver what you promised, and how you treat the customer throughout the disruption. Going forward, disruption management will become an even more central component of customer experience — with the customer at the core, and with a commitment to reducing harm as much as possible.

And yes — technology will be decisive here.

Absolutely. There will be major lessons learned from recent events. Who would have expected a situation where major U.S. airports suddenly lacked sufficient personnel to manage passenger screening processes? The queues were unprecedented.

That reality is already pushing the industry to reduce dependency on manual processes and staffing, and to rely more on technology — so that if it happens again, the impact is not as severe as what we have just experienced.

We also discussed the evolution toward larger aircraft, and the changing aircraft mix across fleets. What stood out to me is not only the role of larger aircraft — and also smaller aircraft now being deployed on the Atlantic, such as A321LR/“extra-long-range” variants like those we mentioned in Iberia’s case — but also how airlines are diversifying across aircraft families.

A case in point is Air Europa, which recently announced a significant Airbus order and appears to be shifting toward Airbus despite historically operating an all-Boeing fleet. That raises a broader question: it increasingly looks — and I emphasize looks — as though Airbus is winning the global competitive battle, while Boeing has been significantly impacted by technical issues. While Boeing’s recent technical problems have not repeated at the same intensity, they have clearly affected public perception.

By contrast, the A320neo engine issue is fundamentally an engine program problem, not a perceived aircraft-design problem in the eyes of the public — even though, operationally, aircraft and engine are inseparable as a system.

You’re referring specifically to the 737 MAX 8 and MAX 9 issues.

Correct. And we should also mention ongoing Boeing challenges: the MAX 10 has been attempting certification for quite some time, and the 777X — including the well-known folding wingtips concept — remains delayed. Some airlines, including Emirates, have been openly frustrated, to the point of questioning Boeing’s credibility and execution due to delays that have extended for years.

And you see the same shift in Europe. Air Europa’s move toward the A350 is emblematic. Boeing once anchored widebody fleets worldwide — the iconic 747, the “Queen of the Skies.” But now we’re seeing more and more widebody strategies centered around the A350.

The 747: a symbol — and a paradox

For me, one of the most memorable episodes of the season — and one of the most emotional — was our episode on the evolution of widebodies, where we dedicated more than half the discussion to the 747.

It’s a paradox: today we talk about Boeing’s reputational challenges, and yet 50-plus years ago Boeing was the unquestioned reference point. And the modern widebody era truly begins with the 747.

I re-listened to that episode recently and felt the same nostalgia. For me, it remains the aircraft of aircraft — the ultimate icon.

It was iconic with Pan Am, with the European carriers — with everyone. And that episode also set up another major theme: the next era of ultra-long-haul.

We are about to see new route concepts, including Shanghai–Buenos Aires via Auckland, and within two years we expect Qantas’ ultra-long-haul launches — Sydney–JFK and Sydney–London — flights approaching 20 hours, enabled by significant cabin reconfiguration to make that experience tolerable for passengers.

We are witnessing a real redesign of network strategy: new aircraft capabilities are enabling a new route map — a new chapter in aviation. But it also raises operational and human questions: how we manage fatigue, how crews operate these missions, and what standards and procedures will be required for the “ultra-ultra-long-range” category.

Even as a passenger, you can feel the gap. I was recently looking at in-flight entertainment offerings — hundreds of movies — yet it still starts to feel insufficient, because it’s essentially the same catalog many of us already have at home through streaming. Airlines will need to keep innovating around what passengers do and how they feel over 18–20 hours in a confined space.

A seasonal story of aviation solidarity: Gander

Given that many of you are listening during the holiday season, I’d like to close with a story that many in aviation know — and that feels appropriate to share at this time of year.

After the 9/11 attacks, U.S. airspace was closed. Any aircraft already in U.S. airspace had to land immediately. And aircraft en route to the United States from around the world were forced to divert and land elsewhere.

A defining example was Gander, in Newfoundland, Canada — geographically positioned at the gateway into U.S. airspace for transatlantic traffic. Suddenly, an airport not accustomed to major surges received an extraordinary influx. As one Delta flight attendant later recounted — helping bring this story to the world — Gander, a town of roughly 10,000 residents at the time, received around 7,500 diverted passengers. Many remained onboard their aircraft for more than 24 hours before being allowed to disembark.

When they finally did, there were not enough hotels, not enough infrastructure, not enough food — not enough of anything, really, to support a surge of that size the way airlines would normally be expected to do.

And yet, within those 24 hours, the community — and surrounding towns — mobilized in what can only be described as a civil-protection-level operation. Schools became dormitories. Churches filled with mattresses. Local residents opened their homes for showers. Food, clothing, and basic needs were organized at scale. Pharmacies provided medicines — in some cases without charge. Volunteers organized tours, gatherings, and moments of community, so people wouldn’t remain frozen in shock, glued to television coverage, uncertain about loved ones or whether others even knew they were safe.

It was a profound act of collective solidarity — a microclimate of humanity in the middle of one of the darkest moments in modern history.

In recognition, Delta and other airlines later helped establish scholarship funding that, to this day, has supported more than 100 young people from that region.

And so, from all of us at Altitude, we wish you a wonderful Christmas season, and a strong start to the New Year. In a moment, Nico and Fabricio will share what’s coming in Season Two, 2025.

It’s a remarkable story — and for those who enjoy musicals, it was brought to Broadway and later filmed as Come From Away, which captures exactly what Arturo just described.

From my side, thank you to everyone who has joined us throughout these seven months. Our audience has grown significantly — thank you for following us on social media and through our website. And I’ll ask Nico to close with a preview of what’s coming next year in Season Two — which we hope will be at least as successful as Season One, if not more.

Closing: the A320 software directive and industry response

Before we close, it’s also worth mentioning the recent A320-family software event — which, for a few hours, put the industry on edge.

Exactly. The trigger was a JetBlue A320-family aircraft on October 30, operating from Cancún to Newark, which experienced a sudden loss of altitude during cruise and an uncommanded pitch-down event. The initial attribution was flight-control computer data corruption. That immediately raised concern within Airbus and among aviation authorities.

As a result, on November 28, Airbus issued a directive to modify software and called for an urgent review affecting up to 6,000 aircraft globally, including a reversion to a prior software version.

Fabricio, can you walk us through the scale of impact and what actually happened?

It’s worth adding that the underlying trigger was attributed to intense cosmic solar radiation at cruise altitude — we’ve seen strong solar storms recently, and that was determined to be the originating factor.

The EASA directive on November 28 generated near panic across the industry, especially given the existing pressure from the A320neo grounding situation tied to engine inspections — something we’ve discussed extensively in earlier episodes.

But the key point is that the response was fast and highly professional. Most operators implemented a software downgrade — reverting to the previous version — a process that typically takes between one and three hours, often completed during aircraft overnight stays. As a result, over 90% of affected aircraft were reviewed, adjusted, and returned to service within a 48-hour window.

There is a subset — roughly 100 aircraft — running older configurations where the change cannot be executed through a simple reversion, requiring removal and shop-level action. Those aircraft may take one to several weeks to return to service. But 100 out of 6,000 is globally manageable, and overall disruption was limited.

The most visible commercial reaction we observed was Avianca temporarily restricting sales inventory — initially for 12 days, later reduced to around five. Some airlines grounded aircraft selectively, for example ANA in Japan. In the U.S., timing was sensitive because it coincided with Thanksgiving returns; however, JetBlue was the primary carrier to ground some aircraft for a short period and execute limited cancellations. And in the U.S., weather impacts — particularly snowstorms in Chicago — were ultimately more disruptive than this software event.

In short: the industry took a major scare, and then quickly stabilized. It did not escalate into a broader crisis — largely thanks to the speed and discipline of operators’ response.

Season close and thank you

Thank you, Arturo. Thank you, Fabricio. In aviation, the only constant is change — and the same applies to us. We will evolve how we bring you insights drawn from our combined century-plus of experience in the airline industry, especially in Latin America.

Follow us on Instagram, Facebook, and LinkedIn, and watch for the launch of Season Two — with a new way of reaching you that we believe you’ll find compelling.

To all our listeners: thank you for being part of this journey with the three of us over these seven months. And special thanks to the team behind the scenes — Daniel and Inés — who help make this production more professional and amplify our work on social media.

This year-end reflection has been meaningful, and Arturo, your story resonated deeply. To everyone listening: warm wishes, enjoy the holidays with those you love, and we’ll see you in January.

Thank you — and congratulations to all. A big abrazo.

Thank you for flying with Altitude. Follow us on social media, visit our website, and we’ll see you in the next episode.