Can governments and authorities keep up with the aviation industry's growth in the region?
"We're doing our part, we need you to keep up with our development" is the battle cry of ALTA executive director Alex de Gunten here at the 8th Airline Leaders Forum. "The states, regulators and authorities are not where they should be on infrastructure, over taxation policies and harmonisation," he told Airline Business Daily.
"The Latin America region has done great in the last 10 years from every perspective - GDP growth, stability etc. Brazil is a growing powerhouse on a global basis," he said.
"Our airlines have adapted to that challenge brilliantly. We've got new fleets, better service, sound management and we're playing a leading role in consolidation. But we are concerned that in some respects, as airlines we're ahead of the curve," said de Gunten.
The slow pace of infrastructure development is a critical issue. "There are a lot of expectations for this region for continued traffic growth but the investment is not there - we need places to land the aircraft we have on order," he said.
"ALTA members and airline passengers are spending close to $4 billion a year on charges and fees. According to ICAO guidelines, all of this money, in theory should be reinvested, but less than half goes to industry projects - this is catching up with us, and may become increasingly crippling." explained de Gunten.
Major events such as the upcoming Olympics and the Football World Cup, as well as increasing volumes of travellers, fuelled by an ever-growing middle-class population, will eventually highlight the problem.
Industry figures show that by 2014, the largest airports in Brazil will be congested (at 85% of design capacity) or over-congested (over 100% of design capacity). "It would be tough to think our great progress over the past decade could be curbed but it is a real danger," said de Gunten.
Brazil's airport privatisation plan could help, but it must be done correctly, he said. Other hotspots in the region are Colombia's Bogotá El Dorado Airport, which is highly congested, among many, while previously saturated Mexico City has a respite of a maximum of two years following the failure of Mexicana before needing more capacity.
While the region's leading carriers such as LAN/TAM and Avianca-Taca are building cross-border structures with a view to operating as single entities, the rules governing them mean it is "still very difficult and costly to do so", said de Gunten. "There is too much fragmentation and not enough harmonisation," he said. "There are 43 countries in this region and each has its own regulatory regime. All this ends up doing is slowing down innovation and costing everyone more."
ALTA is supporting ICAO's Regional System for Safety Oversight (SRVSOP) a group effort for standardisation of regulations and aeronautical procedures, as well as the adoption of common processes of certification for operators and suppliers. ALTA and its airlines support the implementation of these recommendations across the region and are calling on governments in the region to apply and implement the SRVSOP.
This would result in reaching a harmonised, standardised and integrated region. De Gunten and ALTA's target at this year's Forum is to "have a consensus of all players that we need to work together to address these issues", he said. "This is a fairly reachable outcome. We need to agree as industry leaders that these areas are our priorities and are what we are going to be working on."
Once this consensus is in place the aim will be to lobby states and national bodies to turn good intentions into concrete action, said de Gunten.
Source: Air Transport Intelligence news
