ALTA: Airline industry calls for strengthening connectivity and integration in the region
Latin America and the Caribbean has mobilized some 300 million people by 2023, compared to only 18 million in 1970, a growth over time that is reflected by a greater number of connections but still not enough, said Adrian Neuhauser, president of ALTA’s Executive Committee, at the opening of the ninth ALTA AGM & Airline Leaders Forum 2023 conference.
Issues such as the need for greater integration, infrastructure, exchange rate volatility and lack of policies that encourage the production of sustainable fuels are some of the challenges facing the aviation industry in the region, according to industry representatives present at the conference in Cancun, Mexico.
“We believe that ALTA AGM & Airline Leaders Forum 2023, is a great opportunity for us all to come together as an industry and as regulators to discuss and create common spaces to see growth and integration and give greater connectivity to the Latin American region,” Neuhauser highlighted.
The president of ALTA’s Executive Committee admits that there is a shortage of land and rail connectivity and that connectivity is complicated and limits integration between countries.
“We are a region that still has some growing to do. Statistics show that flights per capita in Latin America are still a quarter of what they are in developed countries and that is an opportunity to continue growing,” he added.
José Ricardo Botelho, Executive Director & CEO of ALTA, stated that “although we are almost back to pre-pandemic levels, we must remember that the region continues to face serious infrastructure problems, unnecessary and unrelated ticket costs, currency volatility, rising fuel prices and many other challenges. This is why we want to take this moment to ask that we work together.
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According to Botelho, aviation is not only a means of transportation; it is a pillar of social inclusion. Through it, a greater number of individuals have access to the safest and most efficient means of transportation, which is also shaping up to be the most sustainable in the near future.
“Aviation is conducive to collective well-being, creating opportunities that range from the cab driver waiting at the airport to the local artisan, the restaurant chef and the tour guide, among many others,” added ALTA’s CEO.
Another challenge to which Botelho referred is related to sustainable fuel policies, because despite the region’s natural wealth and the availability of raw materials, there is a notable lack of initiatives in this regard and a lack of incentives.
“We must be cautious and avoid regulations that impose sustainable aviation fuels (SAF) mandates on us, especially when these are not aligned with CORSIA guidelines. A palpable example is in Brazil, where a bill is being debated that proposes a 10% reduction in carbon emissions by 2037 compared to 2026. If we were to rely exclusively on PBSs to achieve this goal, local production would be insufficient, generating an additional cost to the industry of more than one billion,” said Botelho.
ALTA’s executive director stated that carbon offsetting, adjusted to the capacity of each country, emerges as a viable alternative, together with public policies that promote the improvement and expansion of aviation infrastructure and economic incentives for large-scale production and consumption of PAS.
From IATA’s point of view
Willie Walsh, Director General of IATA, who participated in the ALTA AGM & Airline Leaders Forum 2023, made a radiography of the region. He states that the region suffers from problems such as taxes of 50% while in the rest of the world it is 32%. But there are many challenges, the potential for the market is great, but fuel costs affect the profitability of the business.
Another challenge for the region focuses on achieving zero emissions. “Countries will operate at different paces, with the United States and the European Union having to make faster progress, while the rest will need time to reach the targets. The path will not be the same for all airlines and it is wrong to penalize everyone equally, even if they do not operate at the same pace.”
“If they don’t all reach the global target they will fail in their ambitions. But if we don’t have PBS in the region, how can we expect airlines to have sustainability,” he adds.
He insists that exponential growth in UFAS production is required by 2030. He acknowledges that the region is not even 10% close to achieving PBS production by 2050.
It indicates that, just as governments subsidize and incentivize fossil fuels, equal impetus should be given to the production of sustainable aviation fuel.
“All SAF drops have been purchased by airlines. We have demonstrated that we want to be sustainable. Exponential growth in PBS production is required by 2030. Airlines will not be able to afford the production.”
The IATA director insisted that for aviation to reach more people, a framework is needed to incentivize investments in UAS.
“Investors need assurance that they will not change the rules of the game. We need a policy framework. We see a great opportunity in the region.”
Plataforma Informativa de Aviación Comercial líder en América Latina.