Latin American airlines might have weathered another year of economic challenges, but the region's carriers still have plenty to cheer about when it comes to growth in other areas, in the view of the new president of ALTA's executive committee, Enrique Cueto.
Cueto, the chief executive of LATAM Airlines Group, was appointed to the presidency earlier this year. He replaced Aeromexico chief executive Andres Conesa, who had been president for two terms.
Cueto takes over the reins at a time when the region's airlines are still operating amid sluggish economic growth. The economy of Brazil, Latin America's biggest passenger market, remains in the doldrums. Currency depreciation concerns have plagued other Latin American economies, including those of Colombia and Mexico.
In addition, political instability in some countries, such as Venezuela, add to the challenging environment. Global airlines are still waiting for billions of dollars in revenue to be repatriated from Venezuela.
"The region's economy shows a negative growth rate by the end of 2016 and a slight recovery on 2017, so we still have a long way to go," Cueto told FlightGlobal ahead of the ALTA Airline Leaders Forum taking place in Mexico City on 13-15 November.
Despite less-than-ideal macroeconomic conditions, ALTA member airlines are expected to carry more than 212 million passengers in 2016, or five million more than in 2015, says Cueto.
ALTA's airlines have also made significant progress in other areas, such as modernising their fleets and growing their partnerships through interlining and codesharing, he adds.
"Today our region has one of the youngest fleet age averages in the world, with efficiencies beyond 10%, keeping our commitment to reduce the environmental impact of our operations," says Cueto.
FACING CHALLENGES
Challenges related to infrastructure and government-imposed regulations are not new to Latin America's airlines, and Cueto reiterates that these issues are a key focus at this year's Airline Leaders Forum.
ALTA members believe that the region's governments should eliminate visa fees and cut back on the myriad of fees charged to airlines, to encourage further traffic growth.
"Latin America and the Caribbean have close to 80 different types of taxes, and to burden airlines and their passengers with taxes, fuel charges and user charges is not a smart way to foster tourism," says Cueto. "We strongly believe these measures harm tourism and the economy of the states imposing them."
The slow pace of state investment in airports remains a challenge, he adds. The region has the lowest rate of investment in air transport infrastructure, asserts Cueto.
"Quickly we see how our airports, radars and airspaces are saturated to the point of limiting the growth of the industry. This is one of the great challenges we have for the next 15 years if we double the traffic in that period."
Cueto reiterates that the aviation industry helps to boost connectivity within the region, which directly benefits the economies in Latin America. "In this region, sometimes a flight is the only way to be linked with the outside world," he points out. "With better connectivity, we can enhance the competitiveness of cities and countries worldwide."
As an airline association, ALTA is also tackling the multitude of overlapping regulations in the region that govern passenger rights. Cueto says that there are at least 45 different regulations in Latin America, whereas regions with similar or higher populations – like the USA and European Union – have a single regulation.
"For our region, there's a population of 580 million and 45 different regulations. There are even countries with two co-existing legislations and in conflict with each other," says Cueto.
Government-related challenges aside, Cueto believes that ALTA members need to keep pace with the latest technology in the sector. This ranges from the hardware such as more efficient engines and composite fuselage materials to software such as new technologies that improve the passenger experience.
"We need to evaluate the adoption of these new technologies, and what real impact these technologies have on our day-to-day business," says Cueto.
Source: Cirium Dashboard
