Aviation prospects in Mexico, Brazil, Panama, Argentina: IES

October 29, 2009

The Business Times Singapore

AVIATION opportunities in selected countries seen through the eyes of International Enterprise (IE) Singapore.

Mexico: Despite a tough 2008, Mexico still boasts the largest aircraft fleet in Latin America. Plans are afoot to build three new commercial airports - on the Mayan Riviera and at Mar de Cortes and Ensenada - while the 31 existing airports will be extensively enlarged. 16 of these projects have already started.

Under consideration are two more expansion projects and another airport. Adding to these attractions for investors is Mexico City, the single most important airport in the region. It can serve over 32 million passengers a year and handle 900 flights daily. Mexican aviation offers opportunities to almost all players in the aviation industry.

Brazil: Airport services have been expanding over the past few years with the country's economic growth, the modernisation of airports and an increase of passenger demand. The Brazilian aviation market looks promising, with six new airports under construction and five expansion projects just completed or in the pipeline.

Consulting firm Frost & Sullivan singles out airport air-side services as the next big opportunity for investors. The market for such services was $300 million in 2007. Frost & Sullivan expects the figure to grow almost 30 per cent to $385 million by 2012.

Panama: The next 40 years will see the former Howard Military Base transformed into a mixed-use community called Panama Pacifico. The $705 million project includes an airport and logistics hub.

Signalling Panama's commitment to develop the aviation sector at Panama Pacifico, Law 41 offers tax benefits for providers of aviation industry services and aviation maintenance, repair and operations (MRO) services. Aerospace Engineering, an offshoot of Singapore-based ST Aerospace, already has a footprint at Panama Pacifico.

Argentina: The country has the second most extensive air navigation system in South America and its airport infrastructure has been overhauled significantly.

This has led to increasing international air cargo traffic, which is likely to have exceeded 350,000 tonnes in 2008.

Air transport in the country is growing at a conservative pace, and new investments in cargo and passenger operations are under way.

In 2007, 18 million passengers used air services. Half were domestic flights and the other half international. Passenger traffic is tipped to surpass 21 million a year by 2010.

Argentina relies on state-of-the art imported equipment to meet its needs and to modernise its air transport sector.This spells supply opportunities.