The aviation industry moves the world. Not just connecting people, but driving several industries through trade, tourism, employment and connectivity. In Latin America and the Caribbean only, the travel and tourism industry generates 18.9 million direct, indirect and induced jobs and contributes with 9.3% of the region’s GDP (WTTC data). It is a major source of economic and social well-being.
The global economic crisis resulting from the COVID-19 is generating that, for the first time since the 2008 crisis, the global GDP is negative, and one million people is losing their jobs daily in the travel and tourism industry worldwide (WTTC data).
According to new IATA estimates, airlines will reach losses of US$252 billion in passenger traffic revenue in 2020 with a 38% reduction in global RPK (number of passengers carried per distance traveled). In Latin America and the Caribbean, it is estimated that RPK will be reduced by 41% and losses will increase to US$15 billion.
Compared to the number of flights performed by airlines in the region in 2019, we already achieved a 65% reduction in international travel to and from the region by the last weeks of March. In some countries, international flight reductions reached 99% and some of our major hubs such as Tocumen in Panama, Quito and El Dorado in Bogota are completely shut down serving only humanitarian flights.
The recovery in passenger demand will not be quick. JP Morgan estimated that, if all Latin American airlines cancel 100% of their itineraries for an extended period, they will survive between 3 and 10 months maximum.
Therefore, ALTA reinforces its call to the governments of Latin America and the Caribbean on the urgency of implementing temporary measures of critical importance to sustain the aviation industry during this crisis and thus make viable the economic recovery of the entire region by reactivating air transport and tourism once the pandemic is overcome.
ALTA requests governments to implement the following measures in an assertive and timely manner:
1. Provide financial relief to the industry by injecting cash flow and reducing and/or waiving taxes, fees and charges to airlines, airports, air navigation providers and services associated with air transport operations that together would support the return of flights
2. Facilitate debt renegotiation, refinancing and credit lines
3. Adjust working conditions as a contingency measure and relieve social charges
4. Facilitate cargo traffic by streamlining administrative work and reducing costs
5. Flexibility of rules so that the industry can quickly operate after the contingency is over
It is time to act with agility and assertiveness to immediately safeguard jobs, to guarantee a vital service such as air transport of essential goods, personnel and medical supplies, as well as guarantee the sustainability of an industry that will drive global economic recovery. It is in the hands of the States to protect this key industry for the development of the region and multiple industries that depend on air transport.