Page 25 - AAA APRIL - MAY 2017 Online Magazine

MRO FEATURE OVERVIEW

Airlines, thus opening the doors for the
carrier to enter Asia, Qatar Airways has
bought 10 percent stake in Chile’s LATAM
Airlines. “There is a rule of thumb that
aviation in underdeveloped countries should
be growing two or three times the GDP,” says
Juan Carlos Zuazua, CEO of VivaAerobus, the
ultra- low cost carrier. “That is what we have
seen in Mexico since 2003. We have seen
some big growth. 2010 and 2011 were the only
years when there was no growth; that is when
the biggest airline went bust. Right now,
passenger growth is in double digits.” Berger
believes Latin America is in the midst of an
“LCC Renaissance.” He cites the examples
of Copa restructuring Copa Colombia into
new ultra-LCC called Wingo, VivaColombia
launching subsidiary Viva Air in Perum and
Flybondi planning to launch ultra-LCC in
Argentina. In addition, Chilean based Sky
Airline is switching its business model to
ultra-LCC while Volaris has announced a new
subsidiary in San Jose, Costa Rica.
MROs in Mexico believe they have an
advantage over others in other parts of
the globe. “There is a big dearth of good
technicians in other parts of the globe,”
says Hector Coco Quintero, Planning and
Materials Director at TechOps, the Delta
Aeromexico joint venture. “That is not a
problem in Mexico. We offer good quality.
Low cost of labor is another one of our
advantages.”

Advantage North America
Latin America on the Rise city in the world for aerospace investment. After recovering from the recession and
With Latin America poised for growth Mexico has ten Free Trade Agreements with showing consistent growth from 2011, airlines
after a long period of economic decline, 45 countries “ posted record profits in 2016 - US$35.6
the future looks promising for carriers and The new Mexico City International billion. While that in itself is something
MROs in the region. Aerospace investment Airport, which is the second largest airport to cheer about, the larger picture hides a
represent 47 percent of the total FDI in under construction in the world, and the worrying truth; the record profitability is
Mexico; the country was the largest recipient ongoing expansion of the Cancun airport to more the result of huge profits generated
of aerospace-related FDI for the past three include another terminal, offer proof that the by North American carriers than a global
years. The country has over 300 aerospace aviation industry is booming in the country. trend. Airlines in other regions are either
companies in 18 states, with a total of Not surprisingly, the growth has spurred struggling, as is the case in Africa, or just
more than 80,000 jobs. With more than external financial investment in the country. managing to stay afloat. North American
50 specialized programs in aerospace and Antitrust immunity has been granted to carriers, which had registered an EBIT
aeronautics, the country produces 55,000 the Delta-Aeromexico joint venture, thus margin of -1.8 percent in 2008, recovered
engineering graduates every year, numbers deepening the bond between the two quickly after the recession to touch 3.4
that even France, Germany or Brazil cannot partners. “We are rapidly intensifying our percent in 2012. Berger is bullish about the
match. “Queretaro has 31 companies and partnership with Delta,” says Jacome. future prospects of North American carriers
captured 45 percent of FDI in 2016, says There is growing interest in other Latin and expects them to register an impressive
Jorge Jacome, Aeromexico Corporate SVP American carriers as well. While HNA Group EBIT margin of 12.9 percent in 2017. Carriers
Maintenance & Engineering. “It is the fourth has invested $450 million in Azul Brazilian in the region account for 30 percent of the
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