Cargo remains essential to the financial health of the Latin American aviation industry in the post-pandemic environment, according to the region’s airline executives.
Ahead of the 18th edition of the ALTA AGM & Airline Leaders Forum which begins in Buenos Aires tomorrow, LATAM chief executive and ALTA president Roberto Alvo said on 16 October that the industry’s quick pivot to transporting freight saved the industry - and will continue to play an important role as the industry transitions back to a growth trajectory.
“[During the pandemic] authorities were correct to close borders for passengers, but there were no restrictions for cargo,”Alvo says through a translator. ”What we lost in passenger traffic made us more creative, we converted aircraft that were for passengers to cargo.”
“Today cargo is essential for financial health of the airlines, and it will continue to grow as before the pandemic,” he adds.
In addition to conducting humanitarian transports and flying essential medical needs such as personal protective equipment, face masks, ventilators, oxygen and, later, vaccines, during the pandemic, airlines began investing heavily to service the region’s burgeoning e-commerce industry.
As lockdowns and travel restrictions in the past almost three years hindered passengers from moving around freely, customers in Latin America – as in other parts of the world - increasingly turned to ordering goods online. And as that demand grew, so too did the need for timely delivery of those packages to the countries’ farthest corners.
And even though just a small percentage of freight worldwide travels by air, it is usually products that are either perishable or required to be moved from one place to the other quickly, Alvo adds.
Azul, LATAM, Avianca, and even ultra low-cost-carrier JetSmart stepped into the void to satisfy that need.
OPTIMISTIC OUTLOOK
While airline leaders arrive in Buenos Aires optimistic that the industry’s worst days are behind it, and relieved that they were able to manage the last three years despite not receiving any meaningful industry-specific government financial aid. But the industry in Latin America is still forecast to lose about $3 billion during 2022.
“We have to keep in mind that Covid is still around us,” Alvo says, noting that the sector’s losses will be “significant”.
“We are reconsolidating industrial growth and we are in a recovery.”
And though the airlines are targeting “total normality” by 2024, he adds that there are numerous new challenges Latin American aviation must contend with – stemming in part to new geopolitical issues far from the region - in order to return to a growth trajectory. High taxes and fees, expensive jet fuel, high inflation and currency devaluation are just some of the hurdles to clear.
“If we do not tackle [these problems] right now it will be more difficult for everyone,” Alvo says.
