Saturday, November 12, 2022
The Latin American and Caribbean region has fully recovered from the COVID-19 pandemic in terms of passenger traffic, according to data released by the Latin America & Caribbean Air Transport Association (ALTA).
In September 2022, 28.6 million passengers were carried in the region, 1.2% more than in the same month of 2019.
Full recovery
In September 2022, the Latin America and Caribbean region reached for the first time the same number of carried passengers in 2019.
It even exceeded this number by 1.2%, making it the first region in the world to achieve this milestone. Countries like Mexico, Colombia, and the Dominican Republic have fueled the recovery.
Specifically, the region had 28.6 million passengers in September.
In comparison, other regions had the following recoveries:
North America – the second-fastest recovering region, reached 96% versus September 2019
Africa and the Middle East – 93%
Southeast Asia – 75%
ALTA pointed out that the Dominican Republic had the best recovery in September 2022 in terms of international passengers, reaching 124% of carried passengers versus 2019, while Mexico reached 114% and Colombia 113%.
On the other hand, other countries such as Brazil, Chile, Argentina, and Peru have not reached their pre-pandemic traffic levels.
LATAM Airlines CEO Roberto Alvo recently said that it could take two more years for the Latin American industry to fully recover from the pandemic’s effects.
How’s the domestic recovery?
Domestic traffic in Latin America has been recovering rapidly. In September 2022, the region achieved a 3.2% growth versus 2019 levels.
That month, Colombia had outstanding domestic growth reaching 14% above its 2019 levels. Mexico reached 12% of its pre-pandemic levels.
ALTA’s Executive Director & CEO, José Ricardo Botelho, recently said,
The figures show that air transport is an essential service in Latin America and the Caribbean, both for tourists arriving in the region and for the population.
Aviation in Latin America and the Caribbean is on the path of growth.
Therefore, the development of State agendas that promote air transport is essential for our countries to be more competitive to attract investments, generate more efficient operational environments, and give more chances for operators to offer more options to users. Where aviation is, there is development.
The challenges
Despite the ongoing recovery, the region still faces some complex challenges which will determine the fate of many airlines.
Due to the pandemic and the weak economic performance of most countries in Latin America, we have already seen bankruptcies and airlines disappearances.
For instance, the big three –LATAM, Avianca, and Aeromexico– have all gone through Chapter 11 processes and emerged reorganized.
Other carriers have not been so lucky, such as Interjet, Itapemirim Transportes Aéreos, and TAME.
ALTA believes Colombia could experience some loss in its dynamism next year. This is mainly because of the sales tax tariff, which was temporarily reduced from 19% to 5% as a measure to drive tourism during the pandemic, and is now set to return to its pre-pandemic levels.
Argentina has the slowest recovery and is the least competitive country in the region in terms of taxes, fees, and contributions.
According to ALTA, a ticket of US$110 will have to pay US$198 in taxes, fees, and contributions, which imposes barriers for travelers.
Finally, fuel continues to have historically high prices.
In October, the prices of jet fuels were 186% higher than they were in January 2021.
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