According to ALTA, rates must be lowered to increase the number of passengers

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According to ALTA, rates must be lowered to increase the number of passengers
Thu August 29, 2019

One of the great challenges facing the aviation industry in Latin America and the Caribbean is the operating costs of the airlines

 


Air transport is one of the most efficient and safe means of transport, however, there are still challenges that hinder its development.
 
One of the great challenges facing the aviation industry in Latin America and the Caribbean is the operating costs of airlines, especially fuel, which accounts for about 30% of operating costs, and the fees and taxes that make the costs more expensive. operating costs and discourage, to some extent, the ability to increase the competitiveness of destinations and turn the region into a tourist power.
 
In this regard, today we celebrate, with the launch of a new ALTAclip, the joint work of industry and governments to implement measures to reduce taxes and fees for their highly positive and immediate impact on the development of the industry, the number of passengers and flights, as well as in the development of businesses related to the travel and tourism sector.
 
In September 2018, the Chilean government decreed a 20% reduction in boarding fees for domestic flights and a 13% reduction in rates for international flights. This measure showed results quickly with the opening of 6 new routes between September 2018 and June 2019 and an accumulated growth of 17.5% in domestic traffic, compared to the period September 2017-June 2018.
 
This is equivalent to more than 6,100 additional passengers moving daily in the airports of Chile, positioning the country as one of the markets with the highest domestic growth in 2019 globally.
Demand in the airline industry is highly sensitive to price variations, especially for the passenger of tourism. The tourist has multiple destination options to choose from and the decision is based largely on the price variable. In July 2019, Chile made a second rate reduction, with an additional 10% in domestic rates and an additional 3.8% in international rates. "I have no doubt that we will continue to see an impressive development in the Chilean airport market. These measures are extremely positive, directly increase access to air transport and allow more people the opportunity to fly. This in turn contributes directly and indirectly to the economic and social development of the country through the catalytic effect of aviation, allowing the growth of tourism, infrastructure, job creation and more opportunities, "says Luis Felipe de Oliveira, Executive Director & CEO of ALTA.
 
Colombia also has a highly successful case of reducing airport fees. The Cartagena airport reduced in 2015 the international boarding fee from $ 92 USD to $ 38 USD. As a result of this measure, in 2015 international passenger traffic in Cartagena grew 30%. In 2016 it grew 21%, in 2017 20%, in 2018 41% and so far in 2019 11%. The Cartagena airport doubled its international traffic over a period of 3 years and improved the connectivity of the city, since, since 2015, five airlines began international operations in Cartagena and three new routes that previously did not exist (AMS, LIM and ATL).
"From ALTA we celebrate initiatives with a global and long-term perspective for the sustainable development of the airline industry and for the benefit of the passenger. The growth of air traffic generates greater demand for food and beverage provision services, accommodation services and other services tourism, which in turn generate taxes, jobs and economic and social development.For each job generated in aviation, four additional jobs are generated.As an association, we continue to work hand in hand with industry and governments to identify opportunities to optimize costs, generate greater opportunities for air transport users and support the economic and social development of our countries, "said the executive.

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