Economics: Airport suddenly dominates the campaign

MEXICO - Report 23 Apr 2018 by Mauricio González and Esteban Manteca

The issue that has dominated Mexico’s presidential campaign in the past few days is that of the new Mexico City airport that is intended to serve as the country’s most important domestic and international hub. It became apparent decades ago that the current Mexico City airport was inadequate to meet current, much less future passenger demand. But the new airport project, almost two decades in the making, has a history of controversies that have resurfaced in recent days, especially after the leading presidential candidate, Andrés Manuel López Obrador, renewed his call to halt work that is well underway and instead build the facility at a location slightly farther from the capital, where the Mexican Air Force operates an airport of its own.

Those calls have met considerable pushback not only from the other presidential candidates but also a wide range of experts and private sector groups. The country’s Business Coordinating Council initially offered to sponsor a roundtable to debate AMLO’s position, but withdrew the invitation amid outrage from many of its members. Specialized international organizations such as the Mitre Corporation’s Center for Advanced Aviation System Development and more direct stakeholders such as air transportation industry associations have been predictably outspoken, and the country’s richest man, Carlos Slim, took the unusual step of calling a press conference in defense of the project, in which some of his companies are deeply involved.

The economic implications of suspending or canceling the NAIM are clear, including those related to saturation and deficiencies of all types of services for users and carriers in the current airport. It would entail wasting a good part of the resources invested (120 billion pesos to date and 190 billion at the end of this year), representing almost half of all NAIM-related costs including studies, projects, and basic construction work (assets) that are immovable or unrecoverable.

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