Mexican carrier Volaris banking on Mexico regaining Category 1 rating by 2023

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MEXICO CITY (Reuters) – Volaris is planning its budget on the expectation that Mexico will regain its Category 1 aviation rating by the second half of 2023, the Mexican airline’s finance chief said on Tuesday.

“We are budgeting for the second half of next year, and we are closely monitoring that,” Volaris Chief Financial Officer Jaime Pou said in a call with investors.

Mexico President Andres Manuel Lopez Obrador said at a regular news conference on Tuesday that authorities from his country will travel to the United States this weekend to discuss regaining the rating.

Recovering the U.S. rating, which Mexico lost over a year ago, is necessary for Mexican airlines to launch new routes to the United States.

“Things are really advancing,” Lopez Obrador said, explaining that the head of the transportation ministry, the deputy minister and the head of the aviation authority would make the trip to Washington.

Volaris Chief Executive Enrique Beltranena said Mexican authorities were “working on required changes to the aviation regulations (and) mechanisms for financing the expenses that they need to spend for getting the category back.”

Beltranena said things were now “moving along much better” than in previous months following recent shake-ups in Mexico’s transportation ministry, which included replacing the head of the country’s aviation authority.

The head of Mexico’s aviation authority took office last week with the prime objective of recovering the rating, the transportation ministry said in a statement.

The FAA downgraded Mexico’s air safety rating in May of last year, meaning it found Mexico lacked “necessary requirements” to oversee airlines in accordance with international safety standards, or that the civil aviation authority “is lacking in one or more areas.”

Last month, the chief executive of Mexican carrier Aeromexico said “the damage done by (the downgrade) is significant.”