DESTINATION BY NICK EASEN
WHAT ARE YOUR FIRST THOUGHTS about business travel to Latin America? “It’s expensive and it’s a long way,” possi- bly. Maybe followed by: “Needs must,” because 600 million-plus people, a US$6 trillion economy, a growing middle class and a huge demand for new infrastruc- ture and technology make it an attractive region, from Bogota to Buenos Aries, Caracas to Curitiba. Certainly Brazil’s magical BRIC (the de- veloping economies of Brazil, Russia, India and China) status attracts British businesses looking to leverage themselves in emerging markets. Then there are the energy and natural resource sectors. Opportunities beyond the south Atlantic are certainly in abundance. Yet with the Latin American economies looking likely to grow by less than 2 per cent this year means that executives are having to work those trips hard in order to make the 5,000-mile or more journey worth the corporate spend. Brazil, Argentina and Venezuela are now in the midst of varying shades of re- cession. Even high-octane economies like Chile and Peru have slowed down; while growth in Mexico has yet to materialise. Central American markets remain small and fragmented, while the commodity boom that lifted the region for more than a decade is also fading.
PROCEED WITH CAUTION Therefore, the consensus among travel buyers is that spending on trips to Latin America must be approached with caution. This is reflected by figures from the Inter-
national Air Transport Association (IATA), which states that air travel “trade volumes have made no progress this year”. British Airways and Iberia, who fly to 16 destina- tions in the region, aren’t planning more routes either. “Our offer is enough to meet the demand from Europe to Latin America,” says a BA spokesman. “There are still relatively few direct flights
from the UK to some spots specifically in South America compared to other global regions; also, tickets are expensive,” says Kurston Hannaford-Jane, production manager at Two Four Media, as she orga- nises a crew to fly to Santiago, Chile, for a television shoot. “It’s either travel through Madrid, the US via Miami, or Brazil.” Analyse the figures and you’ll find
just over half of passengers flew point-to- point from the UK to South America, ac- cording to aviation analysts OAG, and this proportion remains relatively unchanged from year-to-year. So direct flights are not part of many travel plans, to the chagrin of executives. “Madrid remains the largest transfer point from the UK,” says John Grant, executive vice-president of OAG. “In 2013 some 117,000 travellers used the airport as a hub – that’s the equivalent of around 360 passengers a day in each direction, or about two Iberia scheduled service loads every day. Paris-Charles de Gaulle and Lisbon are also popular transit points, Lisbon most noticeably for traffic for Brazil.” Luckily, only 4 per cent of British
travellers have to go through Miami now to head south, most of which are on American Airlines flights. You still have to clear immigration here, and despite a new immigration hall, transit times can still be up to three hours. Looking forwards flights direct or via a hub aren’t going to get any cheaper. “Air prices among all key countries in the Latin American region will rise in 2015,” says Andre Carvalhal Rosa, regional general manager for Carlson Wagonlit Travel (CWT). “We expect prices in Brazil will increase by 3.5 per cent as capacity normalises and business travel demand picks up pace. Argentina and Venezuela, plagued by runaway inflation, will see airfare spikes of 6 and 7 per cent respectively next year. Mexico will also see increases of 2.5 per cent, given more competition among carriers.”
BUYINGBUSINESSTRAVEL.COM
Yet there are some developments helping buyers like Hannaford-Jane. In late March, the Brazilian carrier TAM joined the Oneworld alliance, along- side full member LAN Airlines, con- solidating the group’s presence in Latin America. TAM adds 45 Brazilian destinations to the network, and its hub in Sao Paulo now doubles up as Oneworld’s operations base in the southern hemisphere. “LATAM Airlines has now finalised its
merger between TAM and LAN to become the biggest airline in the region and one of the most important carriers in the world in terms of network connections,” explains Susan Lancaster, director of global partner relationships at HRG. “The airline will cover services to about 150 destinations in 22 countries.”
BURGEONING BRAZIL Brazil remains the number one power- house as far as corporate travel in Latin America is concerned. It is also the largest and fastest-growing airline market in the
BUYER’S
VIEW • Plan well in advance and ensure that your travel management company is presenting you with all of the options, especially bearing in mind the intricacies of travel to the region.
• Many of the airlines and hotels operate outside the GDS; but, as a travel buyer, you should still be given these options since it will offer you convenience and savings.
• When travelling in Latin America there is still a need to be culturally aware. What applies in Chile doesn’t wash in Brazil. The region is steeped in tradition and local customs.
KURSTON HANNAFORD-JANE, production manager and travel buyer at Two Four Media
BBT NOVEMBER/DECEMBER 2014 85
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