Mexico City - Mexico is cementing its lead as the world's second-biggest market for private jets, snapping them up at a faster clip than bigger Latin American rival Brazil as it benefits from stronger economic growth.
While Mexico has long had a larger standing fleet, it had lagged behind Brazil in annual sales growth. That changed last year, according to plane maker Embraer SA. The direction is likely to continue in 2015 as Mexico's economy is projected to grow while Brazil's is forecast to shrink.
"It's a matter of following the money," according to Brian Foley, a Sparta, New Jersey-based aerospace consultant. "It's Mexico's turn for now."
"We're so motivated by the Mexican market that we decided to open a sales office in the country," Breno Correa, sales and marketing director of Embraer executive jets in Latin America, said in March. "We already have one operations maintenance center in Monterrey and we're looking at installing a second one in or around Mexico City."
Mexico benefits from its proximity to the US, which has the world's largest private aviation infrastructure, according to Rolland Vincent, president of Rolland Vincent Associates in Plano, Texas.
For Embraer, Mexico is a major opportunity, as the firm expects to expand its 2% market share in the country to 16% in the coming years, Correa said. "Early on, pre owned business jets would go into Mexico after they had served in the US. That now has transitioned. It's almost completely new purchase activity," Vincent said.
Although the Mexican peso has been declining against the US dollar in recent months, (making this a great time for a Mexican vacation with US dollars), and Mexico's Central Bank (Banxico) revised Mexico's growth forecasts in May and now expects the economy to grow between 2.0% and 3.0% in 2015 (previous estimate: between 2.5% and 3.5%), the Mexican economy is definitely improving. Private jet sales are just one symptom of many.Sources: Bloomberg.com • focus-economics.com