Peter Cerda, IATA’s Regional Vice President for the Americas, says the spirit of cooperation must be continued for aviation and the Latin American region to thrive
The COVID-19 pandemic has had a devastating effect on Latin America and the Caribbean. Many airlines in the region were struggling to make a profit even before the crisis. They made a loss overall in 2019 and the original forecast for 2020 showed a per passenger profit of just $0.45. And as the region was the last to be hit by the COVID outbreak it will also be the last to come out of it.
Managing the public health crisis is the top priority for governments. But the longer aviation in Latin America remains grounded, the more precarious the situation will become—not just for airlines but for all the businesses that depend on efficient connectivity.
Avianca and LATAM have already filed for Chapter 11 bankruptcy protection in the United States to restructure, and Avianca Peru and Ecuador’s TAME will cease operations altogether. With average cash reserves for just two months, other airlines may not survive this crisis unless government relief and support are provided. Some governments in the region, especially Brazil and Colombia, were quick in providing financial relief, but many others have not yet enabled any meaningful assistance.
Before COVID-19, aviation in Latin America and the Caribbean supported 7.2m jobs
Aviation fulfills an essential role in the socio-economic development of the region. Unlike other continents, we do
not have any viable alternative modes of transport than can provide the essential connectivity for both people and goods. And all economies in the region are reliant on tourism and foreign trade. Agriculture and fisheries need air cargo to export their perishable goods to consumers in other parts of the world. Without aviation, tourists will not be able to explore the islands of the Caribbean nor visit historical sites like Machu Pichu.
COVID-19 has thrown aviation into survival mode overnight. But, as with any crisis, it should create an opportunity to reflect on the past and see what we can improve for the future. The governments in the region should now realize the importance of this sector for their individual economies and for the wellbeing of their people. A case in point is continuing cargo flights that have been a lifeline in bringing in essential supplies to fight the pandemic.
It is our hope that as we rebuild this industry, the current spirit of cooperation with governments in the region will allow for the removal of roadblocks that have in the past stifled the successful development of this sector and often hindered the provision of a good passenger experience. After all, before COVID-19, aviation in Latin America and the Caribbean supported 7.2 million jobs, handled 4.1 million tonnes of air cargo per year, provided connectivity to 385 cities across the region and links to a further 160 cities in other parts of the world, and contributed $167 billion to the region’s GDP.
We are doing our best to ensure that aviation continues to be an important socio-economic enabler, connecting people from the Rio Grande to Tierra del Fuego within the continent and to the rest of the world.
Image credit | Sam Kerr