Mexico outlines measures to expand state control of the skies

By Kylie Madry

MEXICO CITY, July 8 (Reuters) - Mexican officials on Tuesday outlined goals for even greater state and military control over the nation's aviation network, including increased subsidies and investments to boost long-neglected regional airports.

President Claudia Sheinbaum has doubled down on the strategy of her predecessor and mentor, Andres Manuel Lopez Obrador, who handed over control of many public airports to the military and revived bankrupt airline Mexicana.

David Sandoval, deputy director of military-run airport operator Grupo Mundo Maya, said both federal and state governments are rolling out incentives on services ranging from landing and parking fees to checked baggage. He cited the recently opened Tulum international airport as a "cherry on top" success.

The airport is already drawing traffic from the nearby vacation hub Cancun, operated by ASUR ASURB.MX, analysts have said. Military-run airports also face lower usage tariffs than their peers.

The military has been tasked with boosting traffic at older, unprofitable regional airports.

Eric Mario Barrera, technical corporate director of military-run Mexico City Airport Group, said they are battling to overhaul infrastructure while seeking airline interest. He noted airports like Guaymas in Sonora have been "a little bit of a headache" due to low traffic and neglected facilities.

Lopez Obrador launched a massive expansion of Guaymas' port before leaving office, aiming to turn the town into an export hub.

Raul Revuelta, CEO of airport operator GAP GAPB.MX, said many regional airports fail to break even without subsidies, needing about a million passengers annually to profit.

While officials insisted profit was a priority, they also cited a social mandate to serve locations private operators and airlines failed to reach.

Sheinbaum last week, at a ceremony to receive Mexicana's first jet in an order of 20 from planemaker Embraer, said the airline was "by and for the people" and would "fly wherever you are."

When relaunched in 2023, Mexicana was estimated to operate in the red for nearly a decade, government forecasts showed.

The administration is also weighing more public-private partnerships, following signs of success from a joint venture with Mota Engil MOTA.LS at airports in beach towns Tepic and Puerto Escondido, said Carlos Merino, head of state-run Airports and Auxiliary Services.