U.S. officials are planning to downgrade Mexico’s aviation-safety rating in coming days, people familiar with the matter said, complicating a rebound in what has become the world’s largest air-travel market between two nations.

The Federal Aviation Administration has determined that Mexico’s oversight of aviation safety falls short of the top tier of international standards, the people said. Mexico currently has a Category I air-safety rating and would be dropped to Category II, some of the people added. The downgrade would restrict Mexican carriers from increasing service between U.S. cities and limit marketing agreements with U.S. airlines.

U.S. officials are expected to cite issues including insufficient legal authority, training and compensation for Mexican air-safety regulators, some of the people said. An announcement is expected as soon as the week of May 24, people familiar with the matter said.

One U.S. official said the American government was expected to acknowledge that Mexican authorities have addressed some of the FAA’s concerns and to offer assistance resolving remaining issues. A spokesman for Mexican President Andrés Manuel López Obrador declined to comment.

Mexico, which has remained open to U.S. tourists throughout the Covid-19 pandemic, has been the largest international destination from the U.S. through much of the past year as health concerns and government travel restrictions prompted a sharp decline in global air traffic.

More than 2.3 million passengers flew nonstop between the two countries last month, with four times as many seats being flown in May compared with the second-ranked U.K.-Spain market, data provider OAG said.

A downgrade would have the most significant effect on Mexican airlines operating to and from the U.S., including Volaris and Grupo Aeromexico S.A. AEROMEX 0.72% B. de C.V, which has a marketing arrangement with Atlanta-based Delta Air Lines Inc. DAL -0.44%

A downgrade could require Delta passengers to be rebooked directly with Aeromexico if they are scheduled to fly on that carrier’s jets via the airlines’ code-share agreement, people familiar with the matter said.

Delta declined to comment. Aeromexico and Volaris didn’t respond to requests for comment on Saturday.

The number of passengers flying from the U.S. to Mexico was down 16% in April compared to that month in 2019, the year before the pandemic sapped travel demand around the world, according to analysis of government data by Airlines for America, a trade group. By comparison, passenger traffic from the U.S. to the U.K. and Canada, which have tighter travel restrictions, dropped 97% over the same period, according to Airlines for America.

In recent weeks, U.S. passenger traffic to Mexico has risen above pre-pandemic levels, according to the trade group.

The FAA previously downgraded Mexico’s aviation safety rating in 2010 and has taken similar actions over the years against other countries, including South Korea and India.

Write to Andrew Tangel at [email protected]

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This post first appeared on wsj.com

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