As Jose Ricardo Botelho hosts his third ALTA Airline Leaders Forum as the group’s executive director, the region’s aviation industry has much to be proud of
Airlines in Latin America have come out of the global Covid-19 pandemic with momentum, and the sector is thriving. Many carriers have been able to restore their capacities to 2019 levels or higher, and both leisure and corporate travel segments have rebounded strongly.
As aviation leaders gather in Cancun this year, they are celebrating these successes, and addressing some old and familiar challenges.
Also on Botelho’s agenda are new ideas and technologies that he is eager to discuss with the continent’s commercial aviation executives.
”What I love about these events is that everyone comes – the authorities, the airline CEOs, CFOs – it’s a huge responsibility to lead these events,” he tells FlightGlobal, speaking ahead of this year’s event which opened today.
At this year’s meeting, with the global Covid-19 pandemic increasingly in the rear-view mirror, Botelho says airlines in the region are focused on the future.
“We are going to talk about inclusion,” he says. “We are living in the first time in history that up to six generations – the Silent Generation, Baby Boomers, Generation X, Millennials, Generation Z and Generation Alpha – are travelling, and the industry must learn to cater to all of them.”
But despite Botelho’s optimism, the region’s aviation leaders must again address issues that are not unfamiliar: perceived over-regulation by national authorities, additional taxation, supply-chain snags and high jet fuel prices.
Some governments and their aviation authorities continue to have an adversarial relationship with the industry and tend to rule with a heavy hand, many industry executives allege. That top-down approach makes it difficult for airlines and their vendors, employees and passengers to plan with certainty, which is counter-productive to the countries’ economies and well-being of their citizens, Botelho insists.
Government policies impacting airlines
Analysts and observers agree that Mexico is not immune from such issues. A recent unilateral decision by the aviation authority to reduce the number of aircraft movements at Mexico City Benito Juarez International airport – the country’s busiest – has angered carriers as well as their customers. In Brazil, higher taxes have added expense to every ticket.
Argentina, meanwhile, awaits the results of a run-off next month in general election after a first round of voting on 22 October, and ALTA will be anxious to learn about the newly elected government’s stance toward continuing to democratise air travel in that country.
“My request to the authorities around the continent is that they look at the sector in a different way,” Botelho says. “The region has massive potential, if only the governments and regulators would allow that potential to be unleashed.”
IATA statistics show that per-capita trips per year in Latin America are still far less than those in developed countries. While in the USA that figure is 2.6 trips per year, in Chile it is 1.21 trips, in Argentina it is 0.6 trips and in Brazil it is 0.45 trips.
The organisation’s most recent estimates show that Latin America’s aviation industry will lose about $1.4 billion this year, while US carriers, for example, will post profits of $11.5 billion.
On average, airlines in Latin America and the Caribbean lose $4.92 per guest on every trip, while the global average is a profit of $2.25 per passenger, IATA has calculated.
In Latin America and the Caribbean, ground-based transportation networks tend to be limited. Roads are often in bad condition and are sometimes dangerous.
“There are few roads connecting countries. So if you want to develop a place, airlines are absolutely mandatory,” Botelho says. In addition, IATA says about 90% of tourism arrives in the region by air.
Making the economic case
ALTA is in constant communication with the governments of the region, as it attempts to build awareness and understanding of the importance of supporting a healthy aviation sector.
“Where there is aviation, there is development, and there is success,” Botelho says. “When we needed someone to deliver the Covid vaccines, or organs, or to rescue someone, aviation is there. Aviation creates economic opportunities – you build infrastructure, you need to hire people.”
That, he says, is the message he and ALTA must successfully convey to the region’s authorities, especially in countries that have made doing business a difficult endeavour.
“One thing we cannot forget is that while the pandemic is over, the effects on the airlines remain,” he adds. “In this region there was no economic support for aviation [during the crisis], and still some governments are continuing to work against this sector.
“Why is that? I can’t understand it.”
Another hot topic at this year’s ALTA forum is the advent of innovative technologies like AI tools and their adoption and usefulness in aerospace and aviation.
“The region has massive potential, if only the governments and regulators would allow that potential to be unleashed.”
At the mention of AI, Botelho’s eyes light up. “In the past, you saw an aircraft flying and you said, ‘Wow, look, an aircraft’. But now we see that aircraft in terms of data,” he says.
“The amount of data that just one aircraft can provide is just amazing. And that information is power. With AI, it’s time to use this information to increase safety and efficiency, for the benefit of companies, travellers and the environment, too,” Botelho says.
“Can you imagine the amount of data can you collect and use to benefit of the entire world?”
The future potential of air travel in Latin America and the Caribbean, Botelho says, is huge. He is convinced Latin American airlines can become global industry leaders on numerous fronts, and given the opportunity, that the sector can lead the way to more wealth and success on the continent.
“We have so much space to grow,” he says.