Latin American airlines claim US rivals are using their crisis-related government aid to extend their regional dominance.
Aeromexico and Mexicana complain that US carriers had dropped fares on Mexican routes "thanks to the subsidies they are receiving from the US government".
Mexico's undersecretary of transport Aarón Dychter investigated and concluded that US carriers had cut fares as much as 50%, not in response to competition, but in "a clear case of dumping". The Latin American International Air Transport Association, AITAL, has since written on behalf of its 25 airlines to US Secretary of State Colin Powell and Secretary of Transportation Norman Mineta, to complain that US subsidies are being used to widen "the competitive gap" between US and Latin American carriers.
Juan Emilio Posada, AITAL president, says he is disturbed that the US airlines which dominate Latin markets convinced Washington to allocate aid based on system-wide rather than domestic capacity. "This permits the use of such funds to underwrite international operations", he claims.
To underscore his point, Posada notes that US airlines have trimmed domestic capacity by 20%, but left most of their Latin American service network intact. Using aid this way, he claims, violates the "fair competition" clause in bilateral agreements.
AITAL seeks a six-month freeze on capacity boosts or lower fares by US carriers in Latin America. It does not say what it will do if Washington refuses. n
Source: Airline Business
