There’s a new infrastructure plan for Mexico City’s airports, but do the costs add up?

Mexico’s Tourism Secretariat stated recently that the Government’s strategy for Mexico City’s airport infrastructure following the cancellation of the new airport project is to “double the capacity “of the new airport (NMCIA) project’s anticipated scope in Phase I”.

NMCIA’s Phase I capacity was to handle up to 76 million passengers per annum. That means that the two existing airports, Juarez International and Toluca (which had been ‘running down’ during the last few years despite having been investigated to serve a ‘second airport’ role), together with the conversion of the Santa Lucia airbase which is located about 30km from Juarez, will be expected to handle 152 mppa between them.

To put that into perspective, Juarez handled 47.7 million passengers in 2018, a growth rate of 6.6% but one that is declining, mainly on account of capacity limitations – the very reason for the decades-old new airport project in the first place. In common with other capacity-constrained airports across the globe, that growth is mainly coming from larger aircraft rather than higher frequencies.

CHART – Mexico City Juarez International’s passenger growth peaked in 2015 and while it has subsequently slowed it has remained positiveSource: CAPA – Centre for Aviation and Mexico City Juarez International airport reports

Passenger traffic figures at Toluca are not advertised but they are believed to be below one million ppa, down from four million at its peak. So between them, the capacity-constrained Juarez, the almost-retired Toluca and the military airfield and Santa Lucia, are going to have to add over 100 million passengers in theory by the end of 2020, when NMCIA’s first phase should have been completed.

The secretariat also stated the three airport project will cost collectively MEX100 billion (USD5.2 billion compared to an investment of around MXN300 billion (USD15.6 billion) for NMCIA. So over USD10 billion is saved that President ‘AMLO’ can use for social projects, less what has already been and will yet be written (some estimates had that at USD10 billion!)

The question remains, where is the money coming from? While the cost of the replacement scheme is considerably less than NMCIA it will mean a second runway being added at Toluca, which at least is partially privately owned so funding can be raised in capital markets, leaving the government to focus on Juarez and Santa Lucia, where another second runway is already agreed to be delivered in three years.

There is no prospect of them being physically ‘merged’ as there are heavily populated suburbs between them, but a high-speed rail line connecting them is a potential solution. But then Toluca Airport would need one too, and that’s 60 km away to the west of Mexico City. More costs, at a time when Aeromexico’s (the country’s largest carrier) CEO has just stated, “Given our business model we need to operate from a single airport. We would never be operating some from Airport A and some from Airport B”.

AMLO might discover in time that sticking with the new airport wouldn’t have cost that much more, while enhancing the country’s image abroad. For now, perhaps inviting a global operator to take over the construction and co-ordination of the airports – one that has experience of it already, might be a good move?

CAPA SUBSCRIBERS CAN READ RELATED REPORT: New Mexico City Airport cancellation raises issues for the whole region