Latin American airline CEOs say its time to lie low

Cancun
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Carriers from the American Latin Association airlines reported traffic growth of 7.7% in September and by 11.7% year-to-date. It may be the only region still seeing traffic growth anywhere in the world, but ALTA members are under no illusions about next year.

Speaking during the ALTA Airline Leaders' Forum in Cancun, Copa chief executive Pedro Heilbron said: "Right now it is the time to lay low and let the bullets fly by."

Although it is virtually impossible to tell how tough next year is going to be, carriers are cutting back on their growth in anticipation of a rough 2009."Airlines will be responsible and careful and flexible," says Roberto Kriete, chief executive of TACA.

"We have lots of flexibility in our fleet where half of it is leased. This gives us the option of renewing leases if we want to grow, or we can return aircraft as contracts end."

TACA is planning zero capacity growth in 2009.Avianca chief Fabio Villegas says the Colombian carrier will continue its fleet renewal ­programme and it will add some capacity as Airbus A330s replace Boeing 767s. This process will greatly assist in its efficiency drive. It will take some capacity out in 2009 as it retires its fleet of 16 MD-80s, he says.

LAN boss Enrique Cueto says his carrier is taking sensible cost-cutting measures like postponing the construction of a new headquarters building and putting in a hiring freeze.

Cueto is one of several chief executives who believe further consolidation among Latin carriers is inevitable.Mexicana chief executive Manuel Borja Chico says that in his country the number of players has dwindled from 14 to eight.

"Consolidation is unavoidable in the next few years, but it will take due time." In Mexico he sees one network carrier and two low-cost players surviving, as well as some regional airlines.

Leaders at Caribbean carriers, meanwhile, say they have not yet noticed a drop in demand, but are prepared to react quickly should the downturn start to impact their business next year.

New Cayman Airways head Gilles Filiatreault says it is looking at leasing out some capacity for the 2009 off-peak season for the first time. Caribbean Airways chief Philip Saunders notes the carrier opted to wet-lease its latest aircraft in order to retain flexibility if needed, while LIAT chief executive Mark Darby says that, unlike in the past, it is willing to make cuts.