Across Latin America and the Caribbean demand in Revenue Passenger Kilometers (RPK) fell 87.5% in July 2020 year-on-year, with Available Seat Kilometers (ASK) dropping 83.2%. The load factor hit 63.1%, a sign that there is demand for travel in the market.
In terms of cargo, Latin American carriers posted a 32.1% drop in year-on-year international demand in July, compared with a 28.6% decline in June. International capacity decreased 44.5%. The drop in both demand and capacity was the most severe of all regions. In July, the Latin American air cargo market was smaller than the African market for the first time since these statistics began in 1990.
“In many countries across Latin America and the Caribbean we are now getting close to the half-year mark of suspended operations,” said Peter Cerdá, IATA’s Regional Vice President, The Americas. “Generating no revenues and still having to cover costs over such an extended period of time is a fight for survival for any industry. We urgently need governments to work with us on restarting aviation, as this will ultimately help bolster economies and support livelihoods.”
Argentina is the largest market in the region where aviation remains suspended. The industry can no longer accept further postponements of reopening dates. It needs clarity on when flights can resume, especially since all biosafety protocols are in place. LATAM Argentina has already ceased operations and three international airlines—Air New Zealand, Emirates, and Qatar Airways—have announced that they will not resume flights to Argentina, negatively affecting the country’s connectivity once borders reopen.
“Argentina was already going through an economic crisis before COVID-19,” said Cerdá. “The fact that several international airlines have already taken the decision not to return once restrictions are lifted, shows the lack of confidence in the market. Continued procrastination by the government will further reduce the country’s international connectivity. From an industry perspective we would not want the country to become another Venezuela, which over the years has gone from being one of the key aviation markets on the continent to having very limited international connectivity.”
Chile, although having maintained both domestic and international flights, urgently needs to consider lifting border restrictions and quarantine regulations. International airlines have resumed operations to the country, but if demand continues to be depressed, capacity could be removed.
Meanwhile, Colombia has made some progress with domestic service resuming to 15 destinations, including the country’s main hub airport at Bogota. Coordinated planning with the authorities must continue to ensure that international services can recommence without delay.
Following the resumption of domestic services in July, the authorities in Peru have announced the resumption of international services in October. The industry is eagerly awaiting further details so airlines can begin to plan accordingly.
Bolivia has also lifted border restrictions and will permit international flights to and from Brazil, Europe, Uruguay and the United States.
The industry restart in the region is, however, being stifled by a patchwork of rules and regulations. This is despite ICAO’s Take-off guidance containing all the necessary information to open borders safely.
In the meantime, governments in the region will need to consider further relief and aid. While many governments and industry partners have provided relief in the form of deferred payments, changes in taxation, or the lowering of fees and charges, only Colombia has approved direct financial aid.
“While we applaud the decision taken by the government of Colombia to provide financial support to the country’s largest airline, we would like to remind all governments that it is the entire industry which is suffering, and not just one airline,” said Cerdá.
“There is no need to continue restricting air transport as the industry has strict biosafety protocols in place, which have been approved by the relevant authorities,” he added. “We need to learn to coexist with the virus until a vaccine has been found. Aviation is ready to play its part in the socio-economic recovery in Latin America and the Caribbean, but we need governments to allow us to do so.”
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