While market conditions are far better than the dark days of the long-term pandemic downturn, LATAM Group CEO Roberto Alvo last week warned the Latin American industry not to get too comfortable just yet. A strong United States dollar, high costs, lack of state support, and a sensitive economy are all factors to watch out for.
Taking the stand
Speaking as airline president of the Latin American and Caribbean Air Transport Association (ALTA) at the ALTA Airline Leaders Forum in Buenos Aires, Alvo highlighted that the pressures that the industry has to deal with are still around. Target segments are still dealing with the economic impact of the pandemic, and there are additional aspects to keep an eye on, including fuel costs. Altogether, the crisis is not over just yet.
Keeping busy
Nonetheless, according to Skift, the executive does recognize that there is a positive trend. He understands passengers are returning to the skies and that even more will fly soon. Still, it would take a while to normalize in the long run.
Alvo noted that the Latin American industry is going through a robust period. We have seen the likes of Colombia, the Dominican Republic, and Mexico reach pre-pandemic levels while other countries across the region are also on the rise.
This pattern has seen LATAM announce an official date for when it will exit its Chapter 11 bankruptcy process. It will emerge from the proceedings on November 3rd, a significant milestone for the carrier, which was the second airline to file for Chapter 11 in the United States in 2020 following the onset of the global health crisis. Avianca already exited the process last year. With LATAM soon joining the Colombian carrier, we are seeing further evidence of healthy recovery in South America.
Sustainable growth
Alvo also took the time to emphasize that sustainability will be a core feature in the overall road to recovery. Notably, sustainable aviation fuel (SAF) was once again a talking point. Alvo urged Latin American and Caribbean authorities to implement policies to incentivize SAF production. He expressed that this would need to occur for the region to independently move towards to net zero.
According to FlightGlobal, Alvo shared:
” SAF is not the only way to decarbornise the industry, but SAF will be an important part. Today we have no clear indications of the tools to approach this. SAF prices are very high. So, we need to have public policies that will help the transition.”
LATAM is looking to compensate half of its domestic emissions by 2030 and has previously said that it plans to be carbon-neutral by 2050. With a stronghold across the likes of Brazil, Colombia, Chile, Ecuador, Peru, and Paraguay, as well as a network across several other Latin American and intercontinental nations, the airline has an important duty to expand sustainably in this next chapter. From the market economy to government policy it will be a tough task to cover all angles, which is why LATAM’s leadership is cautious about being too optimistic in the current era. (https://simpleflying.com/latam-2-years-latin-american-recovery/)
