Traffic at Latin American airports is growing, but at a slower pace

Traffic at Latin American airports is growing, but at a slower pace
Traffic at Latin American airports is growing, but at a slower pace

By Leonel Ibarra – revistaeyn.com

Traffic growth at Latin American airports will slow to about three times the growth rate of the region’s gross domestic product after recovering from the height of the pandemic, a report by S&P Market Intelligence projects.

However, increased air traffic in countries such as Brazil and Mexico, the region’s expanding middle class and the rise of low-cost airline routes that will allow more people to travel by air will keep demand high.

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“Our projection also considers strong demand from the United States, especially from tourism; the gradual stabilization of the economies of Mexico and the Caribbean; and that most airports in the region continue to expand above pre-pandemic levels,” the report states.

RECOVERY

Air traffic has recovered since the early part of the pandemic, especially for tourism-related destinations, as airports developed new infrastructure and domestic travel remained resilient.

During 2023, traffic volume grew on average 18% for qualifying airports in Latin America, significantly outpacing local economic activity with aggregate GDP growth of 1.8% for the year.

With growth at twice GDP, traffic expectations for the region are similar to those in the United States, but exceed those of its peers in Europe and Asia-Pacific, where full recovery is not expected until 2024.

“We expect an even slower recovery in business passenger volumes in Europe, which we believe is unlikely to pick up soon (see article “European Airports Trundle Along”, published on May 13, 2024),” the agency added.

FACTORS

Other factors contributing to the growth of air traffic in the coming years include the presence of new low-cost airlines, such as the Dominican Arajet and the Colombian Wingo, as well as new and more frequent low-cost routes that have significantly reduced ticket prices, especially for domestic and short-haul routes.

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Furthermore, air travel is becoming more popular due to poor transport infrastructure in the region, for example, the absence of connecting railways; the narrowing gap between the cost of flights and other modes of transport, as well as safety issues with road transport.

However, airports’ financial indicators could come under pressure due to investments in infrastructure and environmental sustainability amid high interest rates, following budget tightening at the beginning of the pandemic.

 
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