Mexico: Key Player in the Future of the Global Aerospace Industry

The world’s largest air show, the Paris air show, which alternates with Farnborough in Britain, is back in June of 2023 for the first time in four years after being canceled in 2021 due to the pandemic. The event is making it clear that the global aerospace industry is poised for significant growth over the next several years due to a surge in demand. Consequently, aircraft manufacturers worldwide are looking for ways to boost capacity and remain competitive. However, the industry must overcome several challenges, including rising costs, supply chain vulnerabilities, and a shortage of skilled labor.

In this context, a variety of government, industry, and private organizations are working to promote the aerospace industry in Mexico as a solution to these problems. Two vital stakeholders that have worked hand in hand for many years are the Federación Mexicana de la Industria Aeroespacial or Mexican Federation of the Aerospace Industry (FEMIA) and American Industries.

As chair of FEMIA’s Promotion Committee, American Industries has long collaborated with FEMIA in a number of events and will be present at FEMIA’s booth for this year’s Paris air show. The two organizations have contributed to Mexico’s rising prominence in the global aerospace industry by facilitating collaboration between academia and public and private entities, advocating for favorable policies, supporting education initiatives, and promoting investment in Mexico.

One of the most significant impacts of their work has been the attraction of aircraft manufacturers to Mexico. As part of these ongoing efforts, in 2015, the two organizations organized, in collaboration with Boeing and the federal government (through the now-defunct entity ProMexico), a seminar for Boeing suppliers to discuss Mexico’s competitiveness in terms of productivity and labor costs. The event took place as part of Mexico’s first Feria Aeroespacial México (FAMEX), Mexico’s biannual aerospace fair organized by the Mexican Ministry of Defense (SEDENA) in collaboration with the Mexican Air Force (FAM). The seminar highlighted how the country’s skilled workforce, excellent infrastructure, and favorable business environment make Mexico the ideal location for aerospace manufacturers to set up or expand operations.

Over the past 20 years, these combined efforts and the host of benefits the country offers have contributed to Mexico becoming a key hub for aircraft manufacturing and the aerospace industry. Mexico is home to more than 300 international aerospace companies, with OEMs like Honeywell, Cessna, Beechcraft, Textron International, Bombardier, and Airbus already established in the country.

The industry is expected to continue to grow in the coming years. At the Paris Air Show, industry executives estimated that up to 2,000 jet orders are available globally in the resurgent commercial jet market. Airbus, for example, announced a 500-plane deal with Indian airline IndiGo on the first day of the event. With this growing demand, manufacturers will look to countries like Mexico with the capacity, infrastructure, suppliers, and skilled labor to ensure they can meet the increasing needs of the aviation industry.

Despite the opportunities presented by this growth, companies face several challenges, with one of the most pressing being a shortage of skilled labor. Organizations like FEMIA and American Industries have contributed to the establishment of aerospace clusters in strategic areas across the country, such as Chihuahua, Queretaro, Jalisco, Nuevo Leon, Baja California, and Sonora. These clusters serve as a space for collaboration between industry, government, and academia to train the next generation of aviation workers and build a pipeline of talent to fuel the growth of the aerospace industry in Mexico.

Another challenge is the rising costs for logistics, raw materials, and components, putting pressure on manufacturers’ profit margins. Companies are looking towards nearshoring, reshoring, and diversifying their supply chains to address this. In Mexico, the concentration of suppliers and the infrastructure supporting the aerospace industry make it an attractive location for manufacturing. This has the additional benefit of enabling companies to leverage economies of scale and proximity to their supply chains to reduce costs.

Added to these challenges, the aviation industry faces pressure to meet sustainability goals and reach net zero emissions by 2050. This presents a significant challenge for manufacturers, who must balance the need for efficiency and cost-effectiveness with environmental considerations. With its strong focus on R&D and readiness to adopt new technologies, Mexico is well-positioned to help the industry meet these challenges. In addition, its proximity to the US market allows companies to decrease their environmental impact, leading to the production of more sustainable aircraft and helping to curtail the aviation industry’s overall carbon emissions.

In conclusion, the Paris air show 2023 reflects the global growth in the aerospace industry. As aircraft manufacturers worldwide seek to boost capacity and remain competitive, they face rising costs, supply chain vulnerabilities, and a shortage of skilled labor. Fortunately, various public and private organizations are working together to promote the aerospace industry in Mexico as a solution to these problems. Two that have been a driving force in advancing Mexico’s position in the industry are American Industries and FEMIA. They have advocated for policies conducive to growth, supported educational programs, and encouraged investment in the country.

With its lower logistics costs, ample skilled labor, and potential to aid in meeting sustainability goals, Mexico is well-positioned to help companies grow and reach their objectives, and American Industries’ shelter services are the easiest and fastest way to establish operations in the country. Contact us today to learn more about how we can support your business expansion efforts in Mexico.