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Latin America DESTINATIONS L


atin American airlines are expected to post an $800 million profit in 2017,


according to IATA. This is slightly improved from the $600 million earned in 2016 but typifies the “could do better” report that has been the region’s issue for the past few years. Venezuela has long been a


particular thorn in the airlines’ side, holding some $3.8 billion of carrier money. The political chaos in the country means any hopes of grabbing some of that money back in the foreseeable future is fast disappearing, and airline service is fading alongside those hopes. Colombian airline Avianca is the most recent to stop flights to the country, joining the likes of Lufthansa, United Airlines and Air Canada.


And then there’s Brazil, once lauded as a member of the emerging BRICS (Brazil, Russia, India, China and South Africa) powerhouses but now lampooned for its underperformance. There are signs it is finally coming out of recession, but the country has a number of aviation-related issues to overcome, including the high cost of jet fuel and onerous regulation. “To begin with, air transport is vital


to Latin America and is a significant enabler of regional economic growth, generating $167 billion in GDP and supporting 5.2 million jobs [including the Caribbean],” says Peter Cerda, IATA’s regional vice-president, the Americas. “And with passenger growth in Latin America expected to double by 2034, the air transport industry’s contribution to regional GDP could jump from $140 billion to $322 billion. “Unfortunately, governments in the


region are hindering sustainable growth with chronic infrastructure deficiencies and debilitating regulation,” he continues. “So, for example, insufficient capacity at Jorge Chávez International Airport in Lima is stifling expansion and the establishment of a regional hub. The airport is currently handling 17 million passengers per year with a terminal designed for 10 million passengers.” Cerda insists that governments in Latin America need to adopt the principles of Smarter Regulation, which means achieving clearly defined measurable policy directives that can be adhered to in the least burdensome way possible. But that mindset appears to be a rare thing in the region. “In Brazil, government fuel policies add some $650 million in extra costs to airlines annually, while regulations around flight delays punish airlines even when they are not at fault,” Cerda says. However, it is not all bad news for the


Peter Cerda


region. Peru is finally embarking on plans to ease the capacity crisis at Jorge Chávez International Airport, for example. Lima Airport Partners (LAP) – majority-owned by Fraport – and the Peru government have signed an amendment to their Lima airport concession agreement, which basically provides the go-ahead for a $1.5 billion expansion programme. Work is due to start next year and will include a new passenger terminal and plans for a second runway. The upgrades point to a brighter, and more spacious, future. During the first half of 2017, the airport served close to 10 million passengers – its annual capacity – an increase of 8.4% over the corresponding period in 2016.


What’s new? – Buenos Aires Even Argentina, not previously known for its flourishing aviation industry, is attracting attention. Low-cost carrier (LCC) Norwegian will make Buenos Aires its first South American route, serving the Argentine capital from London Gatwick. The new route will run four flights a week using a Boeing 787, starting in February 2018. “Buenos Aires is a cosmopolitan capital city with something to offer all travellers and Norwegian has fares to suit all budgets,” says Norwegian CEO Bjørn Kjos. “From Europe, the US, Asia and now


South America, our long-haul network is going global and the UK will continue to be at the heart of our ambitious plans for expansion. We also see huge potential in the Argentine market, so this is not only a major milestone as our first South American route, it is also a first step towards ambitious plans for international and domestic growth in Argentina.” Those plans include Norwegian Air


Argentina, which was established earlier this year. The new Argentine government will certainly be supportive. Speaking at w


routesonline.com ROUTES NEWS 2017 ISSUE 5 55


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