COVID ‘clipped’ wings in Mexico: employment in airlines and airports is 6.5% below pre-pandemic level

The health crisis caused the travel and tourism industry to have a ‘brake’: the airlines reduced their operations almost entirely and airports were close to being empty. Given this, Mexican companies had to reduce their workforce by 6.5 percent in the last two years, some of them temporarily and others, definitively.

Between the two public airlines in Mexico, Aeroméxico and Volaris, and the three airport groups, GAP, OMA and ASUR, they had a decrease of almost 10 percent of your workforcegoing from 25 thousand 304 collaborators in 2019, prior to the pandemic, to 21 thousand 543 in 2020, a drop of 15 percent annually, according to data from Bloomberg and the Mexican Stock Exchange (BMV).

Aeromexico It was the company in the travel sector that had to lay off the most workers, especially in the face of its bankruptcy process, which caused it to eliminate 3,651 jobs in just one year of the pandemic.

In the two years since the pandemic, the ‘Eagle Knight’ has removed 23 percent of its workers from its payroll, that is, the airline went from having 16,299 to 12,557 employees at the end of last year.

Pilots were called to voluntary retirementas well as flight attendants and other ground service employees had to be removed from their posts due to the crisis experienced by the airline directed by Andrés Conesa.

The cost structure of airlines, such as Aeroméxico, has a strong fixed component that increases the expense related to payroll depending on the seniority of the collaborators.

Volaris ‘unfolded’ its wings even more

In contrast, it is Volaristhe airline that has managed to climb to the first position of Mexican airlines in domestic and international traffic and that in two years, has experienced a 36.4 percent increase in its workforce.

Between 2019 and 2020, the airline led by Enrique Beltranena barely eliminated a hundred positions, but after the depths of the pandemic, experienced in May of that last year, the airline began to hire personnel to cope with its expansion.

In 2021, Volaris increased its workforce and 1,908 employees joined the ranks, a growth of almost 40 percent compared to the previous year.

Holger Blankenstein, commercial executive vice president of Volaris, indicated that during 2021, the airline did not lay off any collaborator, in addition to training 600 new pilots and the same number of airport employees.

“We have a strong portfolio of hiring operations staff. And actually we do not anticipate a shortage of qualified candidates for the year”, Blankenstein detailed during the fourth quarter 2021 earnings conference call.

Along the same lines, Beltranena added that the objective of the airline continues to be to have 58 productive employees per aircraft. Regarding the cost of collaborators, he assured that it will be stable, despite the new labor regulations that imply the distribution of profits to employees.

According to René Armas Maes, commercial vice president of Jet Link International, an aviation consultancy, he pointed out that the goal set by Volaris is achievable for a model of ultra-low-cost airlines, which should not exceed 50 active employees per plane.

“Viva Air in Colombia is looking for 50 employees per aircraft and in Europe there are cases of companies that have goals of 35 full-time employees per aircraft, although in some cases there are a number of employees in additional outsourcing”, Armas Maes commented to The financial.

How have airport groups fared?

Pacific Airport Group (GAP) It is the airport operator that had the highest growth in the number of registered employees, with an increase of 14.2 percent at the end of 2021, compared to pre-pandemic levels.

During the health crisis, the airport group had no setback in its number of contracted employees and so far in the pandemic, it has added 208 new collaborators.

On the other hand, the North Center Airport Group (OMA) experienced an increase of 7.1 percent in the last couple of years, reaching 1,038 employees hired to operate its network of air ports.

Southeast Airport Group (ASUR)which operates air ports in Mexico, Colombia and Puerto Rico, had a 1.2 percent decline in the number of its employees employed during the pandemic; however, as the demand for travel was reactivated, the airport operator returned to previous levels, without increases or decreases, to remain at 1,055 employees.