2024 is shaping up to be a record year for international passenger traffic in Ecuador. During the first four months of the year, 1.55 million international passengers traveled to and from the country, an 8% increase compared to 2019. “If this trend continues, 2024 will be the year with the highest number of international passengers in Ecuador,” predicts ALTA Aviation Insight Ecuador, a statistical compilation of air transport in the country.
“Ecuador has launched a State Agenda that includes aviation and tourism as essential sectors for the country’s socioeconomic development. In this regard, the State has taken measures that translate into important advances for the competitiveness of air transport, such as the reduction of the EcoDelta and Tourist Power taxes, which has contributed to democratizing air transport and has encouraged passenger demand,” explains José Ricardo Botelho, executive director and CEO of the Latin American and Caribbean Air Transport Association (ALTA).
“The reduction of these taxes has allowed passengers to access more competitive fares and the country to improve its international connectivity. But, above all, the most important thing is that this increase in passenger traffic has a positive impact on tourism and the country's economy, thanks to the broad catalytic effect of air transport. The potential is still very large and therefore progress must continue,” adds the CEO of ALTA.
"The country is on the right track and is an example of how the adoption of state policies to improve competitiveness can generate benefits for everyone, but the trend can change if important challenges are not considered," adds Botelho.
Ecuador Aviation Insight points out that the country must pay attention to the high operating costs that affect airlines operating in Ecuador, as well as the taxes and fees that fall on passengers, both on domestic and international flights. These additional costs make air service more expensive and discourage passenger demand.
When comparing operating costs in Ecuador with other key markets in the region such as Chile, Brazil, Mexico and Panama, a clear competitive disadvantage for Ecuador can be seen. For example, operating an international operation in Ecuador is, on average, almost three times more expensive than in Brazil and Chile. This cost difference not only affects the viability of airlines, but can also have long-term consequences on the country's air connectivity. High costs can limit connectivity options for passengers and negatively affect tourism and trade, so it is necessary to address the challenges in time.
"Competitiveness in the air sector is crucial for a country's economy, as greater connectivity can boost tourism, facilitate international trade and attract investment. It is therefore essential that Ecuador considers reducing these operating costs to improve its competitive position in the region and foster a more favorable environment for the growth of the air sector and, consequently, the national economy," argues Botelho.
Ecuador Aviation Insight stresses that it is important to review some challenges related to passenger rights. In particular, it highlights the right to withdraw from the trip up to 72 hours before the flight departure and the right to retract the purchase of a ticket up to 48 hours after the purchase has been made. This measure generates uncertainty in flight planning and passengers are negatively affected. It would be healthier to let these issues be dealt with in the transport contracts of each airline with its clients.
2023 in figures
International market
- In 2023, international traffic to and from Ecuador experienced significant growth. A total of 5.8 million seats were offered and 4.7 million passengers were transported, with a 40% increase in capacity compared to 2022.
- Latin American and Caribbean airlines dominated the international market with 66% of capacity, operating 35 city pairs with an average distance per flight of 2,406 kilometers.
- The Quito - Bogotá route was the busiest, with 603 thousand passengers and 765 thousand seats offered in 2023, reaching an occupancy rate of 79%.
- 61% of Ecuador's international capacity was concentrated on traffic within Latin America and the Caribbean.
Domestic Market
- In 2023, domestic traffic in Ecuador grew significantly. The number of passengers on domestic routes rose to 3.8 million, an increase of 46% since 2008.
- Guayaquil - Quito was the domestic route with the highest demand, with 1.84 million passengers and 2.37 million seats in 2023, reaching an occupancy factor of 78%.
Economic impact:
- In 2023, the contribution of the tourism and aviation sector to Ecuador's GDP was 4.4%, down from 5.3% in 2019.
- The tourism and aviation sector also decreased its contribution to employment in Ecuador, going from 5.6% in 2019 to 4.8% in 2023.