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Aviation History
2002
2002 - 1743.PDF
Latin American airlines Administration's International Aviation Safety Assessment (IASA) programme, any expansion in services or additional aircraft on US routes remain on hold until their status has been upgraded. Latin American airlines in addition are complaining of new post-11 September challenges in the form of higher security costs and more restrictive regulations imposed by the USA, which are placing a heavier financial bur den on the already struggling Latin American aviation sector. Latin American airlines have been threatened with fines and increased land ing fees if they fail to comply with the more stringent manifest information requirements. The USA has acted in a way that adversely affects Latin American air lines, says aviation lawyer Robert Papkin, whose firm Squire, Sanders & Dempsey represents several carriers in the region. Papkin believes the economic impact of US-imposed fees and regulations is more responsible for the region's recent losses than the capacity declines following the terrorist attacks of 11 September. The economic assistance that the US gov ernment has offered its airlines is a source of contention among their Latin American counterparts, which view the federal gov ernment loan guarantees and war-risk insurance aid as anti-competitive subsidies. This assistance cannot be duplicated by debt-ridden Latin American countries and has served to widen the competitive gap between the two regions, according to Latin American chief executives. Initiatives In the face of the increasing challenges fac ing Latin American • airlines, there has been a push for functional co-opera tion in the region. A number of initiatives have been introduced over the last few years, including the formation of LatinPass, the consolidation of the Grupo TACA in Central America and Peru and, most recently, of ACES/Avianca in Colombia (forming Alianza Summa). The ground-breaking joint negotiation for Airbus aircraft by LanChile, TACA and TAM a few years ago is another example of Although it the functional co-operation analysts would has not like to see more often - as are joint negoti- emerged ations for fuel and services. unscathed LanChile has been heralded by industry from the pundits as an example of how to get it events of 11 right. This is in no small part due to the September, fact that Chile has had the fastest growing TACA is in economy in the region for the reasonable last 10 years. But for some of the area's financial smaller and more impoverished nations, condition perhaps a better model to study would be either that of Panama's Copa or El Salvador's TACA in Central America. Neither carrier has been able to escape external factors such as Category 2 or the economic fall-out after 11 September, but both airlines remain financially robust and are set to emerge from this latest crisis even better positioned than before. After suffering a loss last year, TACA plans to be back in the black by the end of this year, although it expects revenues to be down on last year's $700 million. The carrier has done what many others have been prevented from doing by social poli cies and strong labour unions - cutting its www.flightinternational.com FLIGHT INTERNATIONAL 11-17 JUNE 2002 33
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