Americas region
Collaborative decisions vital to progress in the Americas 36
Airlines need a seat at the table when Latin American governments discuss aviation-related matters, says Peter Cerdá, IATA’s Regional Vice President for the Americas.
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any countries in the region welcomed a strong recovery in air travel in 2021, especially in domestic traffic. But, Peter Cerdá warned, “that doesn’t mean we can turn back the clock to 2019. Governments and industry partners cannot go back to old habits. The industry’s recovery will be derailed if we get new taxes, higher costs, and restrictive regulations.”
Consumer protection
Regulations, particularly in the area of consumer protection, could also dampen demand at a crucial period in the recovery. Cerdá insists that IATA does not question the merit of consumer protection, but airlines need to be able to provide input into the decision-making process. so that rules are justified and respect the complexity of the operating environment. Brazil has long been the worst offender with its “presumed moral damage,” which essentially turned litigation against airlines into a judicial commodity. Even though the situation has changed somewhat with Brazil accepting the tenets of the Montreal Convention, lawsuits in the country are still at eye-watering levels. Rules that take little account of airline costs and operating procedures can be seen throughout the region. In Chile, it is now possible to change the name on a ticket for domestic flights. In Argentina, protectionist policies are coming to the fore resulting in new fare bands for domestic travel and a monopoly ground services provider controlled by government. Sustainability
Cash cows
In 2022, IATA projects a combined loss of $3.7 billion for carriers in Latin America and the Caribbean. This compares with a $500 million deficit in 2019. Throughout the pandemic, not a single airline in the region received direct financial support from its government. The only relief came from tax and fee deferrals. Unsurprisingly, several airlines went into Chapter 11 and others simply ceased to exist. Yet, just as the recovery in air travel gains momentum, there are multiple examples of governments and stakeholders in the aviation value chain looking to resume their exploitation of airlines as cash cows. “Instead of encouraging travel and tourism, these measures will have the opposite effect,” says Cerdá.
Another area that needs fresh thinking from governments is sustainability, most notably in the area of sustainable aviation fuels (SAF). Even though the industry, including all the IATA members based in Latin America and the Caribbean, has committed to a net-zero carbon emissions target by 2050, there are no regular, scheduled flights taking off from the region that use a SAF blend. And there is no significant infrastructure in place that makes it a likely prospect in the short term. “Again, we have to get governments on board and explain why SAF are so vital to the industry’s future,” says Cerdá. “They need to build the right infrastructure and support production and distribution through carefully targeted incentives. There is a unique opportunity in this region to be a major SAF supplier.” Certainly, the demand will be there. Aside airlines.iata.org
28/02/2022 15:00
