IATA expects the “entire Americas continent” to be open for air travel from November, but foresees a north-south divide in the financial recovery story.
Speaking during a briefing at the IATA AGM gathering in Boston today, IATA’s regional vice-president for the Americas, Peter Cerda, said he was encouraged by the “progressive lifting” of travel restrictions across the continent – particularly the announced relaxations of measures in countries that had notably strong border controls in place, such as Argentina and Canada, and the opening up of the USA from November.
“We are on a good path forward,” he states.
The region’s best news comes from North America, where carriers are expected to outperform those in other global regions on the back of a strong US domestic market, according to fresh financial projections released by IATA at the AGM on 4 October
“The US industry started to turn cash-positive in the second quarter of 2021,” says Cerda. “And it will be the only region in positive financial territory in 2022, with an expected $9.9 billion profit.”
Latin American carriers, however, will see “losses cut from $5.6 billion this year to $3.7 billion in 2022”, he says.
“The strength of the US-Latin American market will be a major contributing factor to the improvement [in financial performance] for Latin carriers and neighbouring US carriers”, Cerda says.
But a collective loss is still expected for Latin American airlines in 2022 thanks to “significant restructuring costs” as the region adjusts to “new business realities”, which will “weigh on financial performance”, Cerda explains.
Indeed, several of Latin America’s biggest airline groups – including Aeromexico, Avianca and LATAM Airlines Group – are still working through restructuring efforts as they seek to emerge from US Chapter 11 proceedings.
Speaking to FlightGlobal before the IATA AGM, Cerda also pointed out that the Latin America region was already on the back foot going into the crisis, having posted a collective loss of $700 million in 2019. “We can’t go back to a money-losing industry,” he said.
As that divide in financial fortunes plays out during the recovery from the Covid-19 crisis, Cerda says that “common threads across the Americas region are maybe not that obvious”, but notes some areas of focus for IATA that “hold true from north to south as we see traffic picking up”.
First, the airline association calls for improved “cooperation from governments, especially related to managing border controls”. The current situation often leaves airlines having to ensure passengers comply with “complex requirements”, Cerda states.
Furthermore, “we need governments to accept digital testing and vaccination certificates and agree common standards”, Cerda insists, citing Panama’s adoption of a system based on the EU’s digital Covid-19 certificate as a positive lesson that other countries should follow.
Third, he suggests that airline suppliers should not seek to “claw back” losses made during the pandemic by upping charges, echoing comments made by IATA director general Willie Walsh during his speech to the AGM on 4 October.