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Blue Skies Are (Nearly) Here Again
Despite turbulence, cloudy weather, and a storm or two, the sun is beginning to break through in Latin America’s aviation market.
Latin American markets will grow at an average of 4.7 percent a year through 2034, serving a total of 605 million passengers, an additional 363 million passengers annually as compared to today.
In 2014, the Federal Aviation Administration projected Latin America’s commercial air transport market to be the fast- est-growing region in the world in terms of passenger demand over the next two decades. According to the forecast, enplane- ments in Latin America are expected to grow at an annual rate of 4.5 percent per year through 2034.
Despite a downturn in 2014, mainly due to the global eco- nomic environment, the numbers for 2015 showed a slight but timely return to the projected estimates. The region’s GDP growth is forecasted at 2.2 percent for 2015, an uptick from 1.2 percent for 2014.
Panama, Bolivia, Peru, Colombia, and Nicaragua are all expected to break 5 percent growth, helping to offset Latin America’s two unstable economies, Argentina and Venezuela, which face contraction of around 1 to 2 percent. Even with the still-fragile economic outlook, many of the region’s main air- line groups are planning to continue their capacity upgrades, looking to capitalize on growth in the stronger markets while limiting exposure in the more volatile countries. For instance, all airlines have drastically cut service to Venezuela to miti- gate funds frozen in the country.
MORE PASSENGERS, MORE PLANES
Positive signs for Latin America’s growing aviation industry show up in a host of different areas. From sheer passenger numbers to Brazil’s demand for aircraft, all signs point toward a bright future for the industry. Latin America expects to have the most passengers flying to and from the United States, and Brazil ranks seventh on the 2011 Airbus list of countries in 20-year new passenger aircraft demand.
Globally, in an Airbus-commissioned study of more than 10,000 people, 69 percent stated that they expected to fly more in the future, with economic growth and greater home/ workplace flexibility given as substantial reasons. While
Latin America, and particularly South America, was impacted by the global recession, the region’s economy is on track to achieve a quick, stable, and strong recovery overall.
SLOUGHING OFF THE DOWNTURN
The International Air Transport Association (IATA) states that Latin America has some of the most profitable airlines in the world; it is the only region where airlines enjoyed profitability for three consecutive years during the recession:
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