ALTA chief flags fuel costs and regional taxes as brakes on Latin American growth
Latin American and Caribbean carriers are facing sustained high fuel costs that are already curbing growth plans, according to the head of the region's airline association, who spoke as the group opened its annual meeting in Mexico City.
Fuel costs are the main concern for airlines in Latin America and the Caribbean and are starting to limit how much the region's networks can grow, according to Peter Cerda, executive director of the Latin American and Caribbean Air Transport Association (ALTA).
Cerda said fuel is affecting carriers based in the region as well as operators flying in from elsewhere. Some airlines around the world have announced they are shifting or downsizing the aircraft they deploy, expecting weaker demand, he said.
ALTA figures show traffic to, from and within the region returned to growth in July after a decline in June, with passenger numbers up 2% so far this year. Even so, growth is below the level recorded in the first quarter, before fuel costs rose sharply. Cerda said the region will not expand as quickly as the association had hoped or forecast.
Speaking ahead of ALTA's annual general meeting and Airline Leaders Forum, which opened in Mexico City on 18 October, Cerda said fuel is the headline issue, but tax and infrastructure problems familiar to the region also threaten to hold back connectivity.
A small number of airlines have ceased operations because fuel costs became too great for them, he said, but the region's main carriers are in a position to get through the difficult period. Recent financial restructuring has left major Latin American airlines relatively well placed to withstand high fuel prices.
Cerda also pointed to network opportunities for the region as traffic flows shift.
Sources
- flightglobal.comALTA chief on fuel costs, familiar challenges and boosting connectivity