Connectivity in the Americas at the center of the stage

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Connectivity in the Americas at the center of the stage
Wed July 15, 2020

With airlines in retreat and airports awaiting authorization to operate, the industry has come together asking for a firm reaction to get ahead

The Covid-19 pandemic has generated great chaos in world aviation, however in the Americas it is where for different reasons the greatest challenge arises. Although the main world-class airlines have announced the restart of operations between August and September, the situation of companies such as Latam, Avianca and Aeroméxico generates great uncertainty. The three companies have played a leading role in the expansion of the continental industry and it is not yet known in detail how they will operate.

In this sense, Zurab Pololikashvili, Secretary General of the World Tourism Organization, has been extremely clear. The official said: "To prevent a recession from turning into a major depression, we will have to make it easier for people to travel with confidence. In the era of pandemics, wealth and health go hand in hand."

At the same time, the International Air Transport Association has once again called on the governments of Latin America and the Caribbean to support the aviation industry, both in terms of providing financial support and to facilitating the resumption of service, in accordance with the guidelines set forth in Take-off, the guide developed by the International Civil Aviation Organization (ICAO).

"Air transport across the continent is now in its fourth month of paralysis. Even with a few countries that have allowed the resumption of service, most still keep us grounded. As an industry we have worked with all stakeholders in the chain of courage to ensure that we can resume in line with ICAO guidelines, agreed globally for the takeoff of the global airline industry. Unfortunately, we are not making the expected progress with the governments that apply them, and any further suspension of operations is jeopardizing the future of aviation, "said Peter Cerdá, IATA Regional Vice President for the Americas.

As revenues have been largely depleted but costs need to be covered, airlines are facing an unprecedented liquidity crisis. An IATA analysis estimates that airlines have consumed cash reserves of $ 61 billion in the second quarter of this year alone. Therefore, governments must urgently provide economic support, which, especially in this region, has been extremely scarce. Globally, government aid totals $ 123 billion, equivalent to 14% of total airline revenue in 2019 ($ 838 billion as a base). For Latin America and the Caribbean, government aid of USD 300 million has been promised, equivalent to 0.8% of the region's income in 2019 (USD 38 billion). This is the lowest percentage that any region in the world has provided. Three of the region's four largest airlines have recently filed for Chapter 11 of the United States Bankruptcy Law to reorganize their debt, and four airlines have already ceased operations.

According to the latest IATA financial forecasts, the industry will lose $ 84.3 billion in 2020, and airlines in Latin America and the Caribbean will post a loss of $ 4 billion. The aviation contribution to the region's GDP is projected to decline by $ 98 billion, jeopardizing 4.1 million jobs.

With the recent announcement of the closure of borders by the European Union to all countries in Latin America and the Caribbean, except Uruguay, a further decrease in income is expected. According to IATA's projection for each month this restriction is maintained, another $ 300 million could be lost.

Aviation has so far played a crucial role in all economies on the continent. The great distances, the lack of infrastructure and the orographic difficulties make aviation the most efficient and safest way to move, therefore, aviation must be allowed to resume as soon as possible. The ICAO Takeoff (Takeoff) guidelines highlight a series of tiered measures to mitigate the risk of COVID-19 transmission in air travel. These protocols have been developed with medical and scientific knowledge and clearly explain how aviation can safely return to fulfill its role as a catalyst for the socioeconomic development of the region. However, too many governments are delaying the application of these guidelines or are proposing options that will impose more operational and financial challenges on airlines. In Colombia, the decision-making power for the reopening of the airports has passed to the individual decision of the mayors, while Panama continues to expand the closure of the country's borders, despite the fact that its airport is one of the main centers nerve centers of the Americas and Argentina has again delayed the date of resumption of domestic flights.

"What we need as an industry is for governments to give clear dates when we can fly again. Take-off protocols agreed by ICAO are the harmonized global plan for this. States must now apply them and not everyone individually reinventing the wheel. While we understand that governments care about the health of their citizens, hampering an essential industry that has developed robust protocols to ensure air travel does not become a vector of the spread of COVID-19 will not help to the much-needed socioeconomic recovery, "said Cerdá.

Fortunately, some governments are allowing aviation to resume, for example, international and domestic flights in Ecuador resumed a month ago, and more Caribbean islands - such as the Bahamas, the Dominican Republic, Haiti, and Jamaica - are receiving visitors. Internal flights in Peru will also resume from July 15, which is a very important step for a country that is highly dependent on aviation for tourism and exports.

"It is good to see that we are making some progress in reopening markets, especially throughout the Caribbean. However, it is necessary for governments to continue to harmonize their protocols with those of ICAO. The fact of diverging from them implies an operational burden for airlines and creates confusion among travelers, at a time when it is essential to rebuild trust. It is essential to ensure that all stakeholders along the travel value chain work together so that we can contribute to revival economic of this region ", concluded Cerdá.


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