Despite being held in Dubai, Chilean and Latin American aviation has an important place in the last General Assembly of the International Air Transport Association (IATA). The most important meeting of airlines and the World Transport Forum provides important pending issues that the countries of the region must address.
After several years, Chilean and Latin American aviation is experiencing a boom in demand like other regions. The favorable winds generated by the needs to travel and stay physically connected encourage the projections of the airline industry.
“Aviation has recovered from the pandemic and is growing profitably to meet people’s needs to fly and transport goods,” says Willie Walsh, IATA Director General.
In Dubai, IATA calls on governments to action on different fronts. To do this, it proposes work based on global standards, modernization of practices and building a more sustainable airline industry.
For Chilean and Latin American aviation, the call to action is not very different. Despite the reduction in costs, modernization of fleets and operations carried out by airlines, the sector faces several turbulences that are not of the sector, but do intervene directly.
“The situation underlines the need for more infrastructure and supporting policy reforms to ensure long-term viability”says Peter Cerdá, IATA vice president for the Americas. “Governments must recognize the (air) sector as a reliable partner.”
Tax problem
In Dubai, Willie Walsh is blunt in his speech: “Taxes are not the solution.” Unfortunately, Latin American governments continue to threaten aviation and users with new tax burdens that will make air transport more expensive.
IATA seeks equitable treatment in tax matters. However, efforts are scarce, limiting the development opportunities offered by air transport.
Examples of tax hikes span the continent. Only in the region is the case of Peru where, in the midst of the problems faced by the Lima airport, a new rate will be sought for passengers in domestic and international transit. Its placement anticipates more expensive rates.
In Colombia, the reintroduction of the 19% Value Added Tax (VAT) on rates raises prices. According to the body that represents the airlines, charges represent almost half of the total value of tickets, which, added to the pressure on the local currency and the rise in fuel, causes the country to lose 7 million passengers in 2023.
Something similar happens in Brazil with regard to fuel prices. With 40% of the expenses of Brazilian airlines, they exceed 30% of the world average.
Excessive regulation
Another important call to action is on the issue of regulation. This is a historic issue for Chilean and Latin American aviation. It is an issue not only due to the lack of homologation of the regulations, but also to avoid the creation of new unclear laws that do not provide value to either the industry or the passenger.
“We continue to see proposed legislation in many countries for consumer protection that will only increase costs and will not necessarily help the traveler,” Cerdá emphasizes.
The United States is an example of new, but adverse regulation. The proposal of new obligations for airlines without distinguishing responsibilities threatens to raise prices and punish passengers.
Peru once again attacks air transport, with a proposal to affect additional services such as seat selection. Further south, in Chile, from time to time parliamentary initiatives are raised that respond more to personal travel experiences than a real problem.
Latin America still has a lot to advance on this issue. To date, there does not seem to be a consensus to move towards a solution, in the midst of a changing scenario at the political level in all countries.
The differences in legislation and the new proposals anticipate an inauspicious scenario for the region, similar to what is happening in Brazil. The country is the most judicialized in the region with one lawsuit for every 227 passengers compared to one lawsuit for every 1.2 million passengers in the United States.
More than infrastructure, a management problem
For years, one of the aviation problems in Chile and Latin America is the lack or delay of airport infrastructure. Today, the construction of terminals is not the main problem, but the problem is how to provide adequate passenger processing.
At this point, the Chilean case comes to light. The lack of public-private coordination between the Nuevo Pudahuel concessionaire and the Investigative Police (PDI) continues to generate huge lines of people. To date, progress is little or practically non-existent. The announcements of new technologies partially materialize after more than a year of installation and whose operation is at least questionable.
IATA calls for more transparent dialogue between other parties so that the infrastructure is adequate. The Chilean case is an example of a new terminal that does not provide a solution to the airport’s historical problems.
By December 18, Peru hopes to open the new Lima terminal. However, to date, it does not have access because the authorities have not carried out the works. There is also no temporary solution to address the problem.
Amid the challenges, IATA highlights the progress experienced by Bogotá’s El Dorado airport. Through OPAIN management and the incorporation of new technology, control lines are reduced.
In a round of conversations, Walsh says there are no perfect airports. However, this does not mean that there are spaces to work on providing solutions to the problems.
Absence of public policies
With the sustainability challenge posed by its own to governments, IATA’s call to action in Dubai has a strong echo in the region. Despite calls from the industry, aviation in Chile and Latin America still lacks public policies, for example, on sustainable aviation fuels (SAF).
In Chile, the Government presents a “Road Map” on SAF matters, but in general terms it qualifies as a sheet of good intentions. After her presentation at the Wings of Change conference, she was criticized by an important actor in the airline industry for the lack of realism in the face of the country’s excessive bureaucracy.
“In many cases there are good intentions, but the regulatory framework, the strategy, is simply not there”Cerdá sentence. “It is important that it be carried out.”
IATA continues to say that the region is very behind and they find it difficult to meet the 2030 goals. In Latin America, there is no refinery that is producing SAF. The only one proposed in Paraguay, it is not known what or how much it will produce.
Call to action
The call to action that the IATA Assembly makes in Dubai has a strong impact on the region. Despite the multiple challenges, there are opportunities, which begin with effective management and dialogue between the public and private sectors. With the work carried out by airlines and airports (in building new facilities), everything seems to indicate that control lies with the Governments and the corresponding institutions.
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