Is Mexico's Aerospace Boom Sustainable? Mexico's Path to Aerospace Innovation with Carlos Sánchez

Carlos E. Sánchez analyzes Mexico's aerospace growth, its competitiveness against global hubs, and the challenges of sustainability, talent, and innovation

Mexico’s rise as an aerospace powerhouse is not just a story of cost-effective labor, but a strategic, yet precarious, alignment of global supply chain shifts and domestic industrial maturation. 

To explain this, we speak with Carlos E. Sánchez, Aerospace Design Engineer and Manager at ARIDO, and an expert at the forefront of this transformation. His insights reveal how Mexico capitalized on nearshoring trends and a skilled workforce to build world-class manufacturing clusters, while also navigating the significant threats posed by rising protectionism and the urgent need for innovation to secure its future in the global market.

Interview with Carlos E. Sánchez

Mexico’s aerospace sector has been one of the fastest-growing globally in recent years. What factors do you see as the main drivers of this growth, and how sustainable is it over the next decade?

Well, the increased economic activity in Asia has increased demand for more flights, which in turn has increased demand for commercial aircraft. Also, the rising of Asian aircraft manufacturers has led to a consolidation of large American and European aircraft manufacturers and their supply chains. These factors and the need to keep competitive have provided incentives for companies to search for a nearshore manufacturing solution, which in recent years has been Mexico.

Mexico´s strategic location, free trade agreements with the US and Canada, a young and cost-competitive workforce, and a relatively safe environment for foreign investment have become the main factors for large aircraft manufacturers and their suppliers to setup manufacturing facilities in Mexico. This has prompted Mexico to create five main aerospace manufacturing clusters which account for more than 300 companies, develop a qualified labor force, and provide competitive costs at all levels.

Mexican manufacturing experience drawn from the automotive and electronics sectors as well as the creation of a network of educational institutions to train the workforce have consolidated expertise to serve the needs of companies.

From a sustainability point of view, it would depend on economic policies in the US and Europe. Recent economic policies in the US have changed the scenario. Economic protectionism including high tariffs and the encouragement of a return to manufacturing in the US may turn manufacturing in Mexico an unnecessary or expensive option. If the trend continues, a possible scenario to optimize costs would be to create a hybrid approach in which companies take advantage of all benefits of manufacturing on both sides of the border.

Moreover, Mexican operational managers have expertise in setting up manufacturing centers and running operations, which may become pivotal in accelerating a transition back to America. However, if protectionism continues, I believe costs of flights may increase and hinder innovation in the sector.

How is Mexico positioning itself to remain competitive against other aerospace hubs, such as the U.S., Canada, and Europe, in terms of cost, talent, and innovation?

To maintain global competitiveness, Mexico must focus on strengthening its human capital and infrastructure. This requires closer collaboration between industry, academia, and the government to develop dual and technical education programs tailored to the industry's needs. For example, successful training models have been implemented in places like Querétaro. Additionally, investment in infrastructure, such as airport development and connectivity, is crucial for improving logistics.

Mexico also needs to diversify and attract foreign investment from other countries and from other related sectors such as Unmanned Aerial Systems (UAS), Urban Air Mobility (UAM), and defense. Recent investment by Mexican companies such as Oaxaca Aerospace and Horizontec in the general aviation sector and Hydra Technologies, Mexican Air Force, among others in the UAV sector show signs of local developments that may take advantage of the experience of the sector.

What are the biggest challenges currently facing the aerospace industry in Mexico, particularly regarding supply chain resilience, skilled labor, and technology transfer?

One of the biggest challenges for the sector is geopolitical uncertainty, including protectionist policies in the United States, which can impact the supply chain. To counter this, we need to increase the resilience and production of higher value-added components within Mexico.

Another significant challenge is talent retention and training, as well as investment in research and development (R&D) to transition from being solely a manufacturing country to a design and engineering hub. Furthermore, bureaucracy and the protection of intellectual property remain areas for improvement to foster local innovation and attract more high-value investment.

How have Mexico’s regulatory frameworks and international agreements (such as compliance with FAA and EASA standards) impacted the development of the aerospace sector?

The regulatory framework in Mexico is constantly evolving and is fundamental to the sector's credibility. The Federal Civil Aviation Agency (AFAC) plays a crucial role not only in overseeing air safety but also in facilitating investment and trade. The recent recovery of the FAA's Category 1 status is proof of the robustness of the Mexican regulatory framework and its alignment with international standards. This achievement is vital because it allows Mexican airlines to expand their routes to the United States, which in turn boosts demand for aircraft and services, directly benefiting the Mexican aerospace supply chain.

What role do you see for public and private investment in accelerating research, development, and innovation within Mexico’s aerospace industry?

To drive R&D and innovation, strategic public and private investment is needed. The private sector must take the lead in increasing design and engineering activities, leveraging the talent of Mexican engineers at competitive costs. This can be achieved through a hybrid approach, where foreign companies' technical teams collaborate directly with local teams on R&D efforts.

At the same time, the government must create an environment that promotes innovation in alliance with the clusters, establishing specialized innovation centers in key technologies that can offer development services and function as incubators for entrepreneurs, bringing investment closer to companies to accelerate their growth.

With the push toward sustainability and green aviation, how is Mexico’s aerospace industry adapting to new global standards in areas like electrification, carbon reduction, and advanced manufacturing?

The future of Mexico's aerospace industry would be shaped by a focus on sustainability and advanced manufacturing. Sector companies are adapting to new global standards, such as carbon reduction and the transition to sustainable aviation fuels, although changes in manufacturing processes depend on certification in the countries of origin.

However, we see a growing adoption of additive manufacturing technologies and composite materials to produce lighter and more efficient components. On the legal side, Mexico´s legal framework will have to quickly adapt to new paradigms in technology if we want to keep being competitive in the marketplace.

The key is to make sure we focus on providing an extraordinary environment for investment, manufacturing, and growth to companies for the coming years.