Unlocking the potential of aviation in Latin America and the Caribbean can bring an increase in jobs and economic activity in the region, IATA's CEO and Director General has said.
Improvements in competitiveness, infrastructure and harmonization will help the region to flourish, Alexandre de Juniac told the Latin American and Caribbean Air Transport Association's (ALTA) Airline Leaders Forum in Panama City.
Aviation currently supports 7.2 million jobs and $156 billion in economic activity across the Latin American and Caribbean region, representing 2.8% of all employment and 3.3% of all GDP in the region.
Far more needs to be done. It is past time for a serious discussion among regulators and stakeholders to find ways to unlock additional value from the restructurings that have taken place in Latin America
De Juniac said the region has the potential to do even greater numbers, citing Middle East figures of 3.3% of all employment and 4.4% of GDP.
"Achieving the same levels in Latin America would mean another 1.3 million jobs and an additional $52 billion in GDP contribution," he said.
Commenting on the need for regulatory harmonization, the IATA CEO and Director General said the full scope of potential efficiencies is not being realized, because regulations remain nationally-based in areas like training, licensing and aircraft registration.
"Far more needs to be done. It is past time for a serious discussion among regulators and stakeholders to find ways to unlock additional value from the restructurings that have taken place in Latin America," said de Juniac.
Recent positive steps have seen Brazil liberalize its regulations on aircraft interchanges, making it easier to transfer aircraft with the same parent company into the country.
In Central America, Cocesna's six member states—Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua—have standardized aeronautical license requirements, meaning that licenses for pilots, cabin attendants and technicians in any of the member states is valid across all.
However, de Juniac said that taxes, fees, and government policies continue to place a huge burden on airlines, making Latin America a "very expensive place to do business" and stifling air travel.
Too many governments see aviation and air travel as targets for heavy taxes and fees, rather than as a catalyst for economic growth and job creation. That is short-sighted
The IATA CEO and Director General pointed to Brazil's jet fuel policy—which inflates airline costs by $255 million annually—and Barbados' recently-imposed ticket tax as negative examples.
"These are just a few of many examples, all illustrating that too many governments see aviation and air travel as targets for heavy taxes and fees, rather than as a catalyst for economic growth and job creation. That is short-sighted," said de Juniac.
Providing a contrasting example, de Juniac said that in Colombia, Cartagena airport reduced its airport fee from $92 to $38, producing a 38% increase in tourism arrivals.
"The additional tourist spend will do much more for the local economy than the airport fee ever could," he said.
Regarding infrastructure developments, the IATA chief said adequate infrastructure is needed to support the current climate and future opportunities for growth.
"The capacity challenges at key hub locations such as Buenos Aires, Bogota, Lima, Mexico City, Havana and Santiago are well documented. Unless they are addressed, the region's economies will suffer," de Juniac said.
Expressing disappointment at Mexico's cancellation of a new international air hub at Texcoco, de Juniac also commented on delays in building a new runway at Lima airport in Peru, and the Jamaican government's $60 million outlay on an unnecessary runway extension as examples of unhelpful infrastructure actions.
Despite the difficulties in the region, de Juniac praised Chile for recent reductions in the airport facility charge.
The reductions will increase the South American country's competitiveness by almost $418 million until the end of 2022.