> Latin American Insights – observations from the CAPA Latin America Aviation & LCCs Summit

Latin American Insights – observations from the CAPA Latin America Aviation & LCCs Summit

The 2023 edition of the CAPA – Centre for Aviation Latin America Aviation & LCCs Summit took place in Querétaro, Mexico between 31-Aug-2023 and 1-Sep-2023.

Here’s some of the key observations from panellists and speakers at the event.

FLYR director of business development: ‘Business versus pleasure’ segmentation is outdated

FLYR director of business development Juan Pablo Gonzalez stated customers want “personalised, flexible offers without a lot of searching”. Mr Gonzalez said “business versus pleasure is outdated”, adding: “Accurate customer segmentation is more important than ever to provide the right offers to the right customers in the right channels”.

Bank of America Mexico CEO: AICM capacity reduction will make travel more expensive

Bank of America Mexico CEO Emilio Romano stated the Mexican Government’s proposed reduction of capacity at Mexico City Juarez International Airport (AICM) will “make travel more expensive”. Mr Romano said Mexico has “a very dynamic industry with modern aircraft, good service and good fares”, adding: “there is still room to grow”. As previously reported by CAPA, the government intends to reduce capacity at AICM to 43 operations per hour.

Volaris CEO: Latin America should have lower emissions reduction quotas than Europe and US

Volaris CEO and president Enrique Beltranena stated “We need to understand that environmental contamination by airlines worldwide is mainly done by European and US carriers”. Mr Beltranena added: “Latin America cannot be targeted with similar quotas for emissions reductions and sustainable aviation fuel usage as in Europe or US”.

Aeromexico head of ESG: Mexican industry needs incentives for SAF production

Aeromexico head of sustainability and ESG Karen Farías stated Mexico’s aviation industry needs incentives and a framework to produce and purchase sustainable aviation fuel (SAF). Ms Farías added: “Right now we are focussed more on SAF than electric aviation, because electric technology is probably not going to be here till around 2040”.

Embraer strategic marketing director: Narrowbody concentration limiting Latin American connectivity

Embraer strategic marketing director Daniel Galhardo Gomes stated “In Latin America we have plenty of opportunity to reach more and more destinations and offer more air services for our community”. Mr Gomes added: “Latin America is the second worst region in terms of connectivity behind Africa. One of the reasons is we have a very concentrated fleet of narrowbodies which limits the possibility to reach more cities”.

CAE head of sales Americas: Airlines’ demand for technological change is ‘overwhelming’

CAE Flight Operations Solutions head of sales Americas Jeffrey Humin stated: “Many of our customers are still running software that’s 30 years old… technology now has direct applicability to how airlines run their operations”. Mr Humin said: “Typically in a year we would see up to 20 RFPs for technology before the pandemic. Last year we responded to over 100”. He added: “The demand for change is overwhelming”.

Viva Aerobus chief network and alliances officer: Increasing airport departure taxes reduces volume

Viva Aerobus chief network and alliances officer Javier Suarez Casado stated airport taxes in Mexico represent “a big chunk of what passengers pay”. Mr Casado said: “One thing LCCs have proven so far is the market is very elastic, so increasing departure taxes reduces volume”. He added: “Airports in Mexico are more profitable than airlines, so ideally we can create a balance”.

Copa Airlines CEO: Latin America depends on aviation for economic growth and prosperity

Copa Airlines CEO Pedro Heilbron stated “We try to be as environmentally responsible as possible, but we should not be in the same boat as more developed countries and economies”. Mr Heilbron said: “Latin America is an underdeveloped part of the world, and aviation is also underdeveloped in Latin America. We depend on aviation for economic growth and prosperity”. He added: “It would be very unfair to restrict the growth of aviation in Latin America”.

Atka Capital managing partner: Latin America aviation taxes stifling market access for LCCs

Atka Capital managing partner Mike Powell stated aviation industry taxes in Latin America are “extraordinarily high”, leading to a stifling of market access for low cost competitors. Mr Powell said: “It’s low cost competitors that really bring value to the market and allow consumers to fly cheaply”. He added: “High taxes in this region get in the way of capital coming in to finance new airlines. The local population ends up suffering”.

TAR Aerolineas CEO: Regional carriers must be agents for economic development

TAR Aerolineas CEO Ricardo Baston stated regional carriers must focus on developing and triggering economic activity rather than solely concentrating on market size. Mr Baston said: “We must focus on being an agent of change for economic activity in the region”.

Queretaro Government working with OTAs to broaden tourist markets

Queretaro State’s Ministry of Tourism Director of Planning and Development Manuel Aguado stated the government is working with online travel agencies (OTA) to “understand the different markets we can attract to Queretaro”. Mr Aguado said the government has also attended fairs in Europe to attract business traffic, as well as campaigning with travel agencies in the US to attract tourists.

Viva Aerobus COO: Latin American airlines growing faster than supporting infrastructure

Viva Aerobus COO Adrian Troija stated airlines in Latin America are “growing faster than the general surrounding structure”. Mr Troija said airports, air traffic controllers and regulators in the region are lacking the capability to support carriers’ growth.

ProColombia VP of tourism: COVID-19 pandemic demonstrated importance of aviation

ProColombia VP of tourism Gilberto Salcedo Ribero stated the COVID-19 pandemic was “the best demonstration of the importance of air transportation”. Mr Ribero said the aviation industry was critical for the transportation of vaccines and equipment during the pandemic.

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