The main players in the commercial aviation industry in Latin America and the Caribbean are meeting this week in Cancun for the 19th edition of the ALTA AGM & Airline Leaders Forum, with a series of panels discussing the major challenges facing air transport both globally and with the local nuances that, even in good years, make it very difficult for Latin American airlines to turn a profit.
The opening remarks were given by Adrián Neuhauser, CEO of Avianca and president of the Executive Committee of the Latin American and Caribbean Air Transport Association, who detailed how commercial aviation in this region went from transporting 18 million passengers in 1970 to 300 million in 2023, generating 7.6 million jobs and contributing 3.5% to the GDP. «It’s a testament to the work we’ve done as an industry,» he noted, emphasizing that the industry continues its trend towards profitability while passing on cost efficiencies to passengers.
Even so, he continued, there is still much potential to tap into when the travel rate per capita in Latin America and the Caribbean averages 0.62, while in the United States it’s 2.53.
But, for this to happen, it’s crucial for the industry and governments to collaborate to address issues such as tax burdens (averaging 50% of the ticket price), a lack of infrastructure (from 2008 to 2022 only 0.07% of Latin America’s gross product was invested in aeronautical infrastructure), and over-regulation.
He also addressed sustainability as an important issue, but its approach must also be adapted to the reality of the Latin American market, far removed from what US or European airlines face.
Aviation as an Essential Service
José Ricardo Botelho, CEO of ALTA, began his message by calling for reflection on how aviation is much more than planes moving people. It also allows for the transport of organs, vaccines, humanitarian aid, cargo, all of which combined generate millions of jobs and stimulate regional economies.
In this regard, he invited a rethinking, stating that «aviation has long ceased to be a luxury industry, it is now an essential service,» and that’s why it’s crucial for the industry to work with authorities to address current issues and prevent the return of past ones.
«Aviation is not just a means of transportation, it’s a pillar of social inclusion. Aviation fosters collective well-being by creating opportunities from the taxi driver who transports passengers from the airport to the chef of a restaurant or the tour guide,» Botelho continued, urging everyone to work collaboratively in their countries to become more competitive.
«Step Aside»
The first panel after the opening featured Willie Walsh, Director General of IATA, who commented on some of the particularities of Latin American aviation.
«When 50% of the tickets are taxes, it’s hard for the region’s airlines to be profitable,» Walsh said.
«We’re not seeking help, we just want them to step aside and let us deliver the potencial de industry has» he continued, also expressing optimism about the future of commercial aviation in Latin America and the Caribbean if the hurdles in taxes, regulations, and infrastructure are overcome.
“No buscamos ayuda, solo queremos que se hagan a un lado y nos dejen entregar el potencial que esta industria tiene”, continúa Willie Walsh, director general de IATA en el #ALTAForum, mostrándose además optimista sobre el futuro de la aviación comercial en Latinoamérica y el… pic.twitter.com/6YLiH2xxC4
— Aviacionline.com (@aviacionline) October 23, 2023
