The Latin American and Caribbean Air Transport Association (ALTA) is expecting that the air industry in the region to go back a decade, due to the current pandemic. ALTA also expects that airlines in the area will reduce their size in the following weeks. Let’s investigate further.
Back to 2009
Gonzalo Yelpo, Director of Legal Affairs at ALTA said yesterday,
“In just a month, the situation in the region changed drastically. By the time we can go back to the skies, we will have much smaller aviation in Latin America, similar to the one we had in 2009.”
He is not the first person in Latin America to predict something like this. In April, Pedro Heilbron, Copa Airlines, said that the pandemic would set back the airline for almost 30 years.
Last year, Latin America had over 300 million passengers. This amount represented almost 8% of the global air market, said Yelpo. Now, the biggest airlines in the region are in deep trouble. In just a matter of weeks, the two leading carriers, Avianca and LATAM, have filed for Chapter 11 bankruptcies. Copa Airlines is currently expecting to operate back on 26 June, but no one knows if this will happen.
Mexico had the worst month for the air travel industry in April, according to recent reports. The passenger flux in the country had a decrease of 94%, in comparison with 2019. This fallout happened even when Mexico never closed its airspace, like Brazil and Chile.
To put it in perspective: in April 2020, Mexico received 509,441 passengers. In the last 11 years, the second-worst month was May 2009, when the country received 2.64 million passengers.
Which airlines have announced fleet size reductions?
To tackle this problem, Latin American airlines are already reducing the size of their fleets. Here are some of the announcements made by carriers across the region:
- Interjet. The Mexican low-cost carrier has returned more than 54 Airbus A320 family aircraft during 2020. Some of them already have new registrations. Air Canada is already leasing one of these airplanes.
- LATAM. After the filing for Chapter 11, LATAM announced the cut of 19 leased aircraft, including two Airbus A350-900, four Boeing 787-9.
- Avianca. The airline will get rid of 14 aircraft, including 13 Airbus and one Boeing Dreamliner. Additionally, Avianca is ending its operation in Peru.
- GOL Linhas Aereas. The Brazilian carrier is planning to let the leases expire of up to 30 Boeing 737 NG.
- Copa Airlines. The Panamanian airline plans to get rid of its older fleet of Boeing 737-700 NG and continue with the exit of its Embraer fleet.
- Aeromexico. During the first quarter of 2020, the Mexican airline returned four Boeing 737-800s and two Boeing 737-700. It is expecting to end the year with a smaller fleet.
- Azul Linhas Aereas. While the airline is not retiring older aircraft, it is deferring the reception of 59 Embraer units until 2024.
- Aerolíneas Argentinas. The Argentinian Government recently announced the fusion of Aerolíneas and Austral under one brand.
Is the lack of Government support an issue?
Currently, Latin American Governments have provided the least number of funds worldwide to maintain the air industry.
According to the International Air Transport Association (IATA), in Latin America, airlines have received US$0.3 billion in funds. Globally, the promised aid by Governments has been of US$123 billion in funds.
Yelpo added,
“If we don’t start to fly again soon, many airlines in the region will be at risk. The support from the Governments is fundamental.”
Do you think Latin American airlines are doing the right thing to keep on flying? Let us know in the comments.