Route Development
US Revokes Mexican Airline Routes Over Air Transport Agreement Breach
US DOT revokes 13 Mexican airline routes citing Mexico’s breach of the 2015 air transport pact, impacting Aeromexico, Volaris and flights at Mexico City airports.
In a significant move, the United States Department of Transportation (DOT) has intensified its ongoing aviation dispute with Mexico by revoking approvals for 13 routes operated by Mexican air carriers. Announced on Tuesday, October 28, 2025, the decision marks a direct response to what the U.S. government describes as Mexico’s persistent failure to adhere to the bilateral air transport agreement governing flights between the two nations. This action is not an isolated event but the latest in a series of measures aimed at addressing long-standing competition and compliance issues.
The core of the conflict revolves around the 2015 U.S.-Mexico Air Transport Agreement, a pact designed to ensure fair and equal opportunity for airlines from both countries to compete. According to U.S. officials, Mexico has been out of compliance with this agreement since 2022. The recent U.S. actions, which include halting specific flight paths and restricting operations at key Mexico City Airports, signal a hardening stance and are poised to have a tangible impact on transborder air travel, affecting both airlines and passengers.
The DOT’s order is precise and multifaceted. It revokes the authority for 13 existing or planned routes for Mexican carriers, directly impacting major airlines including Aeromexico, Volaris, and Viva Aerobus. This measure effectively curtails their ability to expand or maintain certain services to the United States, creating immediate operational challenges for these companies. The decision sends a clear message that the U.S. is prepared to impose direct consequences for what it deems anti-competitive behavior.
Beyond the route revocations, the U.S. has also tentatively canceled all combined passenger and Cargo-Aircraft flights operated by Mexican airlines from Mexico City’s newer Felipe Angeles International Airport (AIFA) to the United States. Furthermore, the DOT has frozen the growth of “belly cargo,” cargo carried in the hold of passenger aircraft, from the city’s primary hub, Benito Juarez International Airport (MEX). These restrictions target crucial revenue streams for airlines and are designed to pressure Mexico into addressing U.S. grievances.
For travelers, the implications could be significant. The DOT has advised that the continued non-compliance by Mexico “may impact travel plans for American citizens.” Passengers with bookings on the affected routes are being urged to contact their respective carriers for information regarding re-accommodation or refunds. The disruption underscores the real-world consequences of international Regulations disputes, potentially leading to fewer flight options and increased uncertainty for the public.
U.S. Transportation Secretary Sean Duffy stated that Mexico has “illegally canceled and froze U.S. carrier flights for three years without consequences.”
The current standoff did not emerge overnight. U.S. authorities point to a pattern of actions by the Mexican government that they argue have systematically disadvantaged American carriers. The DOT contends that these issues have been ongoing for years, with the previous administration failing to take decisive action. The current administration has adopted a more aggressive posture, framing its recent decisions as necessary to enforce the terms of the bilateral agreement and protect U.S. interests.
Several specific actions by Mexico form the basis of the U.S. complaint. A primary issue has been the reduction of flight slots for U.S. carriers at the congested Benito Juarez International Airport (MEX). These slots are essential for airlines to operate, and their rescission is viewed by the U.S. as a direct violation of the principle of fair access. U.S. officials also note that promises by Mexico to complete construction to alleviate congestion at MEX have not been fulfilled.
Another major point of friction was the forced relocation of U.S. all-cargo carriers from MEX to the newly opened Felipe Angeles International Airport (AIFA) in 2023. The DOT claims this move was imposed on U.S. businesses without adequate consultation and has resulted in millions of dollars in increased operational costs. This relocation is seen as a unilateral change that disrupts established logistics chains and harms American companies. These grievances have been compounded by what the U.S. sees as a lack of good-faith negotiation from Mexico. The cumulative effect of these issues has led the DOT to conclude that Mexico is not upholding its end of the 2015 agreement, prompting the series of escalating enforcement actions we see today.
Before revoking routes, the DOT had already signaled its intent to take action. In a significant earlier move, the department proposed withdrawing the antitrust immunity for the joint venture between Delta Air Lines and Aeromexico. This immunity allows the two airlines to coordinate on pricing, scheduling, and revenue sharing, effectively operating as a single entity on transborder routes. Its removal would force them to end this deep cooperation.
In response to the proposal, Delta Air Lines argued that such a move “would cause significant harm to consumers traveling between the U.S. and Mexico, as well as U.S. jobs, communities, and transborder competition.” The threat of dissolving this major airline alliance highlights the seriousness of the dispute. Additionally, the DOT had previously increased its scrutiny of Mexican carriers, requiring them to file their schedules for all U.S. operations and seek prior approval for large charter flights, adding a layer of administrative burden.
The U.S. government’s decision to revoke 13 Mexican airline routes and impose further restrictions represents a critical escalation in a long-simmering dispute. By taking direct action, the DOT is leveraging its regulatory power to force Compliance with the bilateral air transport agreement. The move underscores the U.S. position that actions taken by Mexico, such as reducing flight slots at MEX and relocating cargo operations, have created an unfair competitive landscape that harms U.S. carriers and businesses.
The path forward remains unclear. The Mexican government and the affected airlines have yet to issue a formal, detailed response to these latest measures. Their reaction will be crucial in determining whether the dispute can be resolved through negotiation or if further retaliatory actions will follow. For now, the U.S.-Mexico aviation market, one of the busiest international corridors in the world, faces a period of significant instability that could impact airline operations and traveler convenience for the foreseeable future.
Question: Why did the U.S. revoke approval for Mexican airline routes? Question: Which airlines are affected by the U.S. order? Question: What should I do if my flight between the U.S. and Mexico is affected?
U.S. Escalates Aviation Dispute, Revoking Routes for Mexican Airlines
The Immediate Impact: Routes Canceled and Operations Frozen
A Dispute Years in the Making
Key Points of Contention
Previous Warnings and Regulatory Pressure
Conclusion: An Uncertain Future for U.S.-Mexico Aviation
FAQ
Answer: The U.S. Department of Transportation (DOT) took this action because it states Mexico has not been complying with the 2015 U.S.-Mexico Air Transport Agreement. The U.S. cites issues such as Mexico reducing flight slots for U.S. carriers at Mexico City’s Benito Juarez Airport (MEX) and forcing U.S. cargo operations to relocate to a different airport.
Answer: The order revoking 13 routes directly impacts Mexican carriers Aeromexico, Volaris, and Viva Aerobus. A separate but related U.S. proposal also threatens the joint venture between Delta Air Lines and Aeromexico.
Answer: The U.S. DOT advises any passengers who believe their travel plans may be impacted to contact their airline directly for the most current information and assistance with re-accommodation.Sources:
Photo Credit: DOT
Route Development
Aeroméxico Proposes New Terminal 3 to Expand Mexico City Airport Capacity
Aeroméxico CEO proposes a new Terminal 3 at Mexico City International Airport to increase capacity to 75 million passengers and consolidate operations.
This article summarizes reporting by Mexico News Daily and MND Staff.
In a bold move to address chronic congestion at Mexico City International Airport (AICM), Aeroméxico has publicly proposed the construction of a new Terminal 3 (T3). According to reporting by Mexico News Daily, the airline’s Chief Executive Officer, Andrés Conesa, outlined a plan that would see the new terminal eventually replace the existing Terminal 1 and Terminal 2 facilities entirely.
The proposal, which Conesa detailed during an interview on the “RodCast” podcast, envisions a structural overhaul of the capital’s primary air hub. Rather than serving as a mere annex, the proposed T3 would consolidate operations into a single, modern facility capable of handling significantly higher passenger volumes. This development comes as the airport continues to operate under saturation decrees that have limited flight frequencies since 2022.
According to the details shared in the interview and summarized by Mexico News Daily, the new terminal would be constructed on the eastern side of the airport, where Terminal 2 currently stands. Conesa explained that this location is strategically necessary because the western side (Terminal 1) houses critical fuel farms and pipeline infrastructure that are prohibitively difficult to relocate.
The project aims to increase AICM’s capacity from its current saturation point of approximately 50 million passengers per year to between 70 and 75 million annually. To achieve this, the plan requires a complex logistical reorganization:
Conesa emphasized that this expansion is intended to work in tandem with the Felipe Ángeles International Airport (AIFA) and Toluca International Airport. Together, this metropolitan system could handle over 100 million passengers annually, positioning Mexico City as a competitive global hub.
This proposal arrives at a critical time for Mexican aviation. The previous administration prioritized the development of AIFA to solve saturation issues, shelving earlier discussions regarding a third terminal at AICM. However, Aeroméxico argues that AICM remains the preferred hub for connectivity and requires immediate modernization to maintain efficiency.
While Aeroméxico pushes for a structural overhaul, the federal government has initiated a different set of improvements. As noted in reports surrounding the proposal, the government recently announced an investment of approximately 8 billion pesos for renovations at AICM. These works are primarily focused on aesthetic and functional upgrades, such as bathroom improvements and painting, in preparation for the 2026 FIFA World Cup, rather than the capacity expansion Aeroméxico suggests.
“Building T3 on the T1 side is not viable due to the presence of critical fuel farms…”
, Andrés Conesa (via RodCast/Mexico News Daily)
The Reality of a Dual-Hub System
Aeroméxico’s proposal signals a shift in the industry’s narrative regarding Mexico City’s airspace. For years, the political debate framed AIFA as the replacement for AICM’s saturation woes. However, Conesa’s comments suggest that the industry views a dual-hub system as the only viable long-term reality. By proposing a massive investment in AICM, the airline is effectively stating that AIFA alone cannot absorb the projected growth of the metropolitan area.
Political and Financial Hurdles
The feasibility of this project relies heavily on political will. With the Sheinbaum administration currently focused on “aesthetic” renovations for the World Cup, a multi-billion dollar capital project that disrupts current operations (moving hangars and demolishing terminals) faces a steep uphill battle. Furthermore, the funding model, whether public, private, or a partnership, remains undefined. Without explicit government backing, T3 remains a conceptual vision rather than an active project.
What is the main goal of the Terminal 3 proposal? Where would the new terminal be built? Does the government support this plan? Will this replace the Felipe Ángeles Airport (AIFA)? Sources: Mexico News Daily
Aeroméxico CEO Proposes Massive Terminal 3 Project for Mexico City International Airport
The Terminal 3 Proposal Details
Capacity and Logistics
Strategic Context and Government Response
Current Renovations vs. Structural Change
AirPro News Analysis
Frequently Asked Questions
The goal is to replace the aging Terminals 1 and 2 with a single, larger Terminal 3 to increase capacity to 75 million passengers annually and streamline operations.
It is proposed for the eastern side of the airport, currently occupied by Terminal 2.
As of January 2026, the government has not officially adopted this specific proposal. Current government efforts are focused on an 8 billion peso renovation of existing facilities for the 2026 World Cup.
No. The proposal envisions AICM and AIFA working together as a metropolitan system with a combined capacity of over 100 million passengers.
Photo Credit: Mexico City International Airport
Route Development
South Dakota SB 76 Funds Airport Expansions with Zero-Interest Loans
South Dakota Governor Larry Rhoden pre-files SB 76 to provide $30M in zero-interest loans for expansions at Sioux Falls and Rapid City airports.
This article summarizes reporting by Dakota News Now.
South Dakota Governor Larry Rhoden has officially pre-filed Senate Bill 76 (SB 76), legislation aimed at injecting capital into the state’s two largest commercial aviation hubs. According to reporting by Dakota News Now, the bill proposes utilizing state funds to issue zero-interest loans for critical infrastructure projects at Sioux Falls Regional Airport (FSD) and Rapid City Regional Airport (RAP).
The announcement, made on January 9, 2026, marks a strategic pivot in how the state approaches infrastructure financing. Rather than offering direct grants, the Rhoden administration is seeking to leverage the Revolving Economic Development and Initiative (REDI) Fund to support airport modernization. This move comes in response to record-breaking passenger growth and the urgent need for expanded terminal capacity in both East and West River regions.
Governor Rhoden, who assumed office following the resignation of former Governor Kristi Noem, has framed the legislation as a fiscally responsible method to support economic development. By utilizing a loan structure, the administration argues that the funds will eventually return to the state for future use, addressing concerns raised by fiscal conservatives during previous legislative sessions.
Senate Bill 76 outlines a specific mechanism to transfer unobligated capital from the Housing Infrastructure Fund to the REDI Fund. According to the legislative text summarized in recent reports, the total allocation is capped at $30 million.
The bill designates an equal split of the available resources between the state’s two primary airports. Under the proposed terms:
Crucially, these funds are structured as 0% interest loans rather than grants. This distinction is intended to make the bill more palatable to lawmakers who previously opposed direct spending on specific airport projects. As noted in the research surrounding the bill, the repayments will flow back into the REDI Fund, allowing the capital to be “recycled” for other economic development initiatives across South Dakota.
Both airports have reported double-digit percentage increases in passenger traffic since 2019, pushing current facilities to their operational limits. The funding from SB 76 is intended to accelerate multi-million dollar expansion plans that are already in development.
Officials at Sioux Falls Regional Airport, also known as Joe Foss Field, have outlined a comprehensive master plan to address congestion. The proposed expansion includes the construction of a new concourse connection and significant terminal upgrades. Key elements of the project include: According to project estimates, the total cost for the FSD expansion is projected between $130 million and $140 million, with a target completion date around 2027. The airport is a major economic engine for the region, generating an estimated $400 million in annual economic activity.
Rapid City Regional Airport is facing similar pressures driven by high tourism demand for the Black Hills and Mount Rushmore. Passenger traffic at RAP has surged by approximately 30% since 2019. The proposed funding would support a multi-year terminal expansion and renovation, including:
The introduction of SB 76 occurs as Governor Rhoden prepares for the 2026 election. The administration has positioned the bill as a “win-win,” balancing the need for infrastructure growth with fiscal prudence. In a statement regarding the initiative, Governor Rhoden emphasized the necessity of the project:
“South Dakota continues to grow, and we need infrastructure that can grow with us. We’re putting existing dollars to work in a smart, responsible way.”
, Governor Larry Rhoden (via official press remarks)
However, the bill may face debate in the upcoming legislative session. Critics, including some conservative lawmakers, have previously argued that surplus funds should be prioritized for property tax relief rather than targeted loans. Additionally, there is occasional friction regarding the concentration of state resources in Sioux Falls and Rapid City, though proponents argue that these airports serve as the primary gateways for the entire state.
The shift from grants to zero-interest loans represents a significant tactical adjustment by the Rhoden administration. By utilizing the REDI Fund, the state is effectively treating airport infrastructure as a renewable economic investment rather than a sunk cost. This approach may serve as a model for other states looking to fund aviation infrastructure without permanently depleting general funds, particularly in an era where federal funding can be unpredictable. If successful, this model could accelerate the timeline for regional airports to modernize, ensuring they can accommodate the next generation of commercial aircraft and passenger volumes.
Sources: Dakota News Now
South Dakota Governor Pre-Files SB 76 to Fund Major Airport Expansions
Legislative Framework and Funding Mechanics
Loan Structure and Distribution
Scope of Infrastructure Projects
Sioux Falls Regional Airport (FSD)
Rapid City Regional Airport (RAP)
Political Context and Stakeholder Reactions
AirPro News Analysis
Sources
Photo Credit: Sioux Falls Regional Airport
Route Development
US Airports Issue Record $24B Municipal Debt for Infrastructure Upgrades
In 2025, US airports borrowed $24 billion in municipal debt to modernize terminals and expand capacity amid rising passenger volumes.
This article summarizes reporting by Bloomberg and Aashna Shah.
The original report is paywalled; this article summarizes publicly available elements and public remarks.
US airports issued a record-breaking $24 billion in municipal debt in 2025, marking a 12% increase from the previous year as facilities race to modernize aging infrastructure. According to reporting by Bloomberg, major hubs ranging from Atlanta to San Francisco are undertaking deep renovations to accommodate surging passenger volumes.
The borrowing spree comes as the aviation industry faces a critical intersection of booming travel demand and outdated facilities. With the Transportation Security Administration (TSA) recording multiple record-breaking screening days in 2024 and 2025, airport authorities are leveraging the municipal bond market to fund massive capital improvement projects. These initiatives aim to expand capacity, update security protocols, and enhance passenger amenities before the system is overwhelmed.
The primary catalyst for this historic issuance volume is the relentless return of travelers. As noted in industry data supporting the Bloomberg report, the TSA screened nearly 3.1 million passengers on June 22, 2025, setting a new single-day record. This resurgence has pushed terminals built in the 1960s and 70s to their operational limits.
Furthermore, airports are engaging in “catch-up” spending. Many capital projects paused during the COVID-19 pandemic have been restarted and accelerated. Bloomberg highlights that these renovations are essential for airports working to keep pace with the travel boom while simultaneously upgrading outdated concourses.
“Airports spanning from Atlanta to San Francisco are deep in renovations as they work to keep up with booming passenger volumes…”
, Bloomberg
Several major international hubs accounted for the bulk of the 2025 debt issuance. Based on public filings and market data, the following airports led the charge in securing funding for expansion: New York’s JFK International was a significant driver of the year’s volume, securing approximately $3.3 billion in combined debt. This includes $1.37 billion in Green Bonds issued in July 2025 to fund Phase A of the New Terminal One, expected to open in 2026. An additional issuance supported the development of Terminal 6, a new 1.2 million square foot facility.
DFW issued roughly $1.97 billion to support its capital program. Key projects include the construction of Terminal F, a new sixth terminal featuring 15 gates, and the complete reconstruction of Terminal C, one of the airport’s busiest legacy facilities. DFW utilized innovative financial structures, such as “put bonds,” to manage near-term interest costs effectively.
Chicago O’Hare tapped the market for $1.6 billion to fund its ORDNext Program. This massive initiative involves the creation of a “Global Terminal” and new satellite concourses designed to replace the aging Terminal 2, integrating domestic and international operations.
The world’s busiest airport, Hartsfield-Jackson, issued $1.03 billion, largely in the form of Green Bonds. The funds are earmarked for the widening of Concourse D, a critical project to alleviate congestion in the airport’s narrowest concourse and improve passenger flow.
Despite the sheer volume of supply, investor appetite for airport debt remained robust throughout 2025. Market analysts attribute this to the “yield hunger” of institutional buyers. Airport bonds often offer slightly higher yields than general obligation bonds because they are revenue-backed, repaid through airline fees and concessions, and are frequently subject to the Alternative Minimum Tax (AMT).
Additionally, the sector is viewed as a safe haven. Airports have proven resilient post-pandemic, maintaining strong credit ratings as essential monopolies. The Federal Reserve’s pivot to interest rate cuts in 2025 helped lower borrowing costs on the short end of the curve, although long-term yields remained attractive to insurance companies and bond funds due to the record issuance volume.
We view this record borrowing not merely as a financial trend, but as a race against time. The aviation sector is effectively rebuilding the plane while flying it. With major global events like the 2026 World Cup on the horizon, US airports are under immense pressure to modernize facilities that were designed for a different era of travel. While the $24 billion figure is staggering, rising construction costs and labor shortages mean that this capital buys slightly less infrastructure than it would have five years ago, making efficient project execution just as critical as securing the funding.
Why are airports borrowing so much money now? What are Green Bonds in the context of airports? How does this affect travelers?
Drivers of the $24 Billion Surge
Key Infrastructure Projects
JFK International (New York)
Dallas Fort Worth (DFW)
Chicago O’Hare (ORD)
Hartsfield-Jackson Atlanta (ATL)
Market Dynamics and Investor Interest
AirPro News Analysis
Frequently Asked Questions
Airports are borrowing to fund urgent infrastructure upgrades needed to handle record-breaking passenger volumes and to replace aging terminals that cannot support modern security and aircraft requirements.
Green Bonds are debt securities issued specifically to fund environmentally sustainable projects. Airports like JFK and ATL use them to finance energy-efficient buildings and carbon-reduction initiatives.
In the short term, travelers may encounter construction zones and detours. In the long term, these funds will result in more spacious terminals, better amenities, and more efficient security checkpoints.
Sources
Photo Credit: Miami International Airport
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