How has the Latin American airline industry recovered so far?

The Latin American and Caribbean Airlines (ALTA) held the first days of its ALTA Airline Leaders Forum between Sunday and Monday. Many airline CEOs discussed topics regarding the reactivation of the airline industry in the region. How has the Latin American airline industry recovered so far? How’s the recovery going so far? The Latin American and Caribbean region is recovering faster from the COVID-19 pandemic than the rest of the world in terms of passenger traffic. Despite this piece of information that gives us hope, financially, the outlook is very different. According to the International Air Transport Association’s (IATA) CEO, Willie Walsh, the Latin American region will lose US$5.6 billion in 2021. The industry will reduce its losses to nearly US$4 billion in 2022, but still. Moreover, according to Copa Airlines’ CEO, Pedro Heilbron, the operational loss in Latin America will be higher than the world average. He stated that worldwide, the operating loss will be -11%, while Latin America will be -18%. Historically, the region has struggled to be profitable, and average net losses date back to 2018. To tackle the crisis, the airline industry and governments have to push towards the standardization of travel requirements. Nevertheless, pre-COVID issues like lack of infrastructure, taxes, and high costs will return in the mid-term. IATA’s complaints against airport fees continue During his participation at IATA’s AGM in early October, Willie Walsh launched a complaint against increasing airport costs worldwide. Yesterday, he continued. Willie Walsh said, “We are seeing traffic steadily rebounding, which shows that recovery is on its way. However, in parallel, we are seeing an increasing trend by our “partners” in the aviation value chain to increase taxes and fees.” Argentina, Costa Rica, the Dominican Republic, and El Salvador are examples in the Latin American region. Argentina increased the international departure tax from US$51 to US$57. Costa Rica is looking to increase the airport security fee at San José International Airport by more than 70%. The Dominican Republic is planning to increase ground handling fees by just over 6% in 2022, and El Salvador could add a US$1.50 per passenger agricultural inspection fee to airline tickets, IATA said. Additionally, airlines are facing poor operational planning to meet rebounding demands. Several airports across the continent, like Bogota’s El Dorado and Mexico City’s, are back to congestion levels. The ALTA Airline Leaders Forum sustainability stand Besides the industry recovery, the big topic on ALTA’s Forum was sustainability. Like LATAM’s CEO, Roberto Alvo, said, the industry has to tackle the environmental concerns, and it will be the biggest challenge of the first half of the current century. In order to achieve net-zero carbon emissions by 2050, the airline industry has a lot of work ahead. The first and most significant challenge is to push the Sustainable Aviation Fuels (SAF) agenda with the regional governments. Nevertheless, the OEMs will also have to produce radical airframe designs (like Airbus’ ZEROe initiative), and the right policies must be in place. “This is an airline commitment. And we will drive the need to change. And to be successful, we need alignment across our stakeholders, including governments. The technology roadmap for sustainable aviation is more complex than for road transport. But the mechanism to deliver change is the same. Governments must lead with incentives. And the most important area for immediate concern is SAF,” added Walsh.

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How’s the recovery going so far?

How’s the recovery going so far?

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How’s the recovery going so far?

How’s the recovery going so far?

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