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López Obrador (AMLO) finally inaugurated the Felipe Ángeles International Airport (AIFA). We do not know the final cost of this work, but the government has said that the figure is around $3.96 billion. On top of this must be added between $13.5 and $16.6 billion dollars which is the cost of canceling the New Mexico City Airport (NAICM) project.
I have seen comments in the media that with the money that the cancellation has costed, another 5 airports could have been paid for. That math adds up but ignores the fact that this money was owed to creditors, it was not available to build anything. In economic terms, the opportunity cost of building AIFA was the price of canceling NAICM.
Even more simplified, we could say that Lopez Obrador decided to pay $20 billion for a $3.96 billion airport.
The discussion about the money is complicated, we do not know exactly how much either airport cost. The only thing we know for sure, however, is that NAICM was not built, but it was nevertheless paid for.
Given this situation, criticism of the new airport has focused on its remoteness from the city, the lack of transportation from the city to the airport and, finally, the terrible architecture and decoration, which for many is even in bad taste.
It’s horrible and it’s far away, there’s no doubt about it. But what remains to be answered is whether the airport will fulfill its function of reducing the overcrowding of the Benito Juárez International Airport (AICM.)
The AICM has a capacity for 30 million passengers, although before the pandemic it received 50.3 million passengers. The NAICM in its first phase could handle 69.6 million passengers, a figure that would increase to 137 million when it reaches its last phase.
AIFA, according to the plan presented, has a capacity of 20 million in its first phase and will supposedly be able to serve 80 million passengers per year. It is with these figures that the Mexican government tells us that 80 + 50 is 130 and that, therefore, it is the same capacity as NAICM at a much lower price.
The price issue is now completely disproved, the NAICM was paid for anyway, but the capacity issue is not as it is portrayed. The AICM has a severe saturation problem, the 50.3 million passengers that it was designed to serve completely exceed the airport, this problem was going to be solved with the capacity of the NAICM, but it is only partially solved if we add the real capacity of the current airport with that of Santa Lucia… 30 + 20 = 50… The problem is small, but it is still a problem, and in addition, we paid an additional $16.6 billion dollars.
Toluca International Airport (AIT) could be the key to making the accounting add up, as it has a capacity for 10 million passengers. However, having capacity does not necessarily mean you have passengers; AIT opened in 2006 and in 2008 it served almost 4 million travelers. From then on, its users went down, serving around half a million passengers in the year prior to the pandemic, why? Because after the closure of Mexicana Airlines, the airlines that flew in Toluca decided to move to the AICM, finally their clientele was in Mexico City.
That is where another key detail appears, the airlines did not want to fly from Toluca and now they do not want to fly from Pachuca, the closest city to AIFA, not only because of the distance but also because it is not certified to be an international airport. The Mexican government has announced plans to restrict 30% of activity at that airport to “encourage” airlines to move to their new white elephant. Back to the calculations. 30×30 %= 21… 21+20= 40… Now we are 11 short of the almost 51 needed… there are 10 theoretical ones at Toluca, but no lines willing to move there.
To show the world that AIFA is an international airport, the government announced with fanfare that the first flight out of the country would go to Caracas and that it would be operated by CONVIASA, the Venezuelan regime’s airline which, by the way, also has flights to Bolivia, Cuba, Nicaragua and Russia.
This last detail and the capacity calculations make me think that maybe AMLO is thinking in the long term that a regime like his, where most people do not have the money to fly and those who can only have permission to visit other dictatorships. I hope it is not that, and that he is just very bad at adding up.
José Torra is an economist, Research Coordinator at Caminos de la Libertad, co-author of the Fraser Institute's Economic Freedom of North America Index, and co-host of the podcast Libertad Aquí y Ahora // José Torra es economista, Coordinador de investigación en Caminos de la Libertad, coautor del índice Economic Freedom of Northamerica del Fraser Institute, y co-conductor del podcast Libertad Aquí y Ahora