The pandemic affected tourism worldwide, and airline companies found it difficult to get back to business right away ―especially since the industry suffered major modifications in matters of resilience.
Tourism was nothing but losses, mainly in aviation, where previous problems amplified and required special attention when things got back to normal. In Latin America, airline companies recorded considerable losses of about five billion US dollars in 2020.
Things have gotten better since then, with firms opening up to new horizons and addressing the challenges of burdensome taxes and outdated regulatory systems. Recently, the region succeeded in tying additional connections to popular global locations to revive the sector. Let’s see what it’s about.
Latin America connects with Asia
After most airlines in Latin America recovered from the pandemic, the industry started strengthening relations with other regions, such as Asia. The operator Air China is now flying to Sao Paolo, departing from Beijing via Madrid twice a week, making it the third Asian company, after Emirates and Qatar, to land here.
Argentina has also made efforts to increase its flights in collaboration with Brazil and Ecuador, making it easier for domestic flights to be operated. New different destinations are available across the region, such as the following:
- Air Caraïbes introduces constant flights to Sint Maarten;
- LATAM will operate between Santiago and Sydney;
- SKYhigh Dominicana will fly to San Salvador;
- Azul Conecta will have connections from Belo Horizonte to Jacarepaguá;
New seasonal routes to come
Along with considerable returns and surprises, some carriers will also have seasonal flights to support the increasing number of tourists or sustain the demand for movement in specific periods. For example, Aerolíneas Argentinas will fly between San Paolo and Bariloche from July 1st to mid-September.
Air Caraïbes, on the other hand, will provide flights from Paris Orly and Sint Maarten during the 2024/2025 winter season. Bi-weekly flights will be assured by powerful planes and will include locations like the Dominican Republic, French Guiana, or Guadeloupe.
Delta Air Lines, on the other hand, will supply its flights during the high season with seven operations per week instead of only three, focusing on the services between Atlanta and Cartagena. Some flights will also depart from New York.
The difficulties of recovering after the pandemic
Latin America wasn’t the only region affected by the COVID-19 pandemic, but the industry was hindered by low or lack of funding from the government to offset losses. That’s why some airline companies like Avianca or LATAM sought help from the US Chapter 11 protection to negotiate some of their contracts or sell assets.
Avianca, for example, experienced a massive disruption after having only 7.9 million passengers in 2020, while it had previously boarded no less than 30 million people yearly. The crisis caused considerable losses in the local economy, so the airlines received help and exited bankruptcy protections after receiving finances.
However, some airlines were unable to raise funds and were at high insolvency risk, as governments were unable to do much. While Brazil helped reduce cash outflows and Colombia reduced the VAT on tickets, Chile didn’t offer state aid.
Certain problems remained
Although most carriers could recover after the pandemic, some still struggle with inefficiency. Based on on-time arrivals, these airlines have the worst brand image:
- Intercaribbean Airways has had only half of its total flights arriving on time;
- Aerolineas Argentinas has had numerous delayed and cancelled flights in 2023;
- Jetsmart has about 30% of its flights arriving late at their destination;
Hence, carriers seek considerable investments to improve their efficiency, but their most prominent issue is the lack of sustainability and eco-friendly technologies. Although the SAF (sustainable aviation fuel) goal is set to achieve carbon neutrality by 2025, many companies fear they won’t be able to accomplish it.
Another challenge is the massive bureaucracy and taxes and tariffs hindering progress. Colombia and Ecuador are a few examples of proactive approaches to improving the airline industry. Still, the judicial system in Brazil jeopardizes aviation by maintaining high fuel taxes or labour costs.
Other airlines improved
Despite challenges, some airlines found ways to improve operations and set the competition high. Volaris, for example, is considered the best company, as it has a rating of on-time arrivals higher than 90%, so only a few flights have been delayed or cancelled. Copa Airlines is following closely, with an 89.26% OTP. The operator has recently introduced 90 new routes across Central America since the number of passengers has increased considerably in 2024.
LATAM Airlines Group is another successful flight operator whose improvements made it possible to collaborate again with Delta Airlines for more routes and Touch Inflight Solutions to access the latest technological developments and improve the flight experience.
Considering LATAM’s Boeing issue from the first quarter of 2024, when technical problems led to a sudden mid-air drop, the company tried to regain its trust and adopt new standards and strategies for avoiding similar happenings in the future.
Central America must prepare for a massive influx of flights
According to Statista, the number of Latin American air traffic passengers travelling to or from the United States is set to boom in 2040, supposedly reaching almost 200 million based on current predictions. However, since the region will have only 100 million passengers in 2024, companies must prepare to withstand the massive demand by equipping their aircraft with superior technology to ensure safety and efficiency.
Airline companies need to implement proactive communication, especially regarding baggage or documents. Prioritizing customer support is the most important, but improving aircraft and their technologies should also be considered.
What do you think about Latin America’s airline industry?
The COVID-19 pandemic compromised the airline industry worldwide, making it considerably difficult to recover financially. Still, as time passed and businesses gained a little confidence due to an increasing number of passengers, we’ve seen how regions like Latin America are trying to provide better flight services. Recently, some airlines in the region expanded their flights across countries and overseas, adding seasonal flights and purchasing new planes to support the high demand.