Page 26 - TMI Special 10-11 2020 FlipBookv2

INSIDER

Buenos Aires Ezeiza International Airport in Argentina prepares to open by establishing stringent health and safety protocols and undergoing in-
depth sanitizing.

Latin America sees first hints of recovery from COVID-19 shut downs

The COVID-19 pandemic arrived Argentina: health and financial woes Montevideo was restarted only a few weeks
in Latin America at the end of February Argentina narrowly avoided an ago. Bernabel Trading has reported higher
this year. Initially, cases were few and far overseas debt default in the second quarter than normal average sales tickets but ad-
between and the speedy introduction of of 2020, after the government was able mits to lower passenger numbers.
lockdowns and border closings by most to secure a last-minute agreement with
governments helped control the spread of international bondholders. Experts expect International air service restarts
the virus. the economy to shrink between 11 and 12% Is there light at the end of the tunnel?
But in the second quarter of the year this year as the pandemic bites on top of an A positive sign is that in just under a month
Brazil swiftly became one of the worst af- already depressed economy. They are pre- Sao Paulo – Guarulhos has established a
fected countries in the world; and as of the dicting a 5% expansion in 2021, however. solid program of international flights to
end of September, six of the top-12 most The Argentine Peso has been remark- Europe and North America and in October
impacted countries in the world (Brazil, ably stable at around 76/78 to the U.S. regional destinations to Panama, Peru, Co-
Colombia, Peru, Chile, Argentina and Dollar, but the black-market dollar has lombia and Chile will be added. Although
Ecuador) are in South America. More than drifted close to 140, as the government there is no official confirmation, Buenos
8 million cases have been diagnosed in the tries to prevent Argentine residents and Aires Ezeiza will increase operations
continent and more than 250,000 deaths. companies from gaining access to the of- from the current limited number of special
Not surprisingly, the pandemic has severely ficial FX market; foreign reserves continue flights to a reduced scheduled service
damaged the economies of all Latin Ameri- to be scarce, pushing black-market demand with Madrid, Paris and London as the
can countries with no clear indication on higher. However, as the Argentine govern- lead destinations in Europe and Miami in
what lies ahead. ment continues to postpone measures to North America. Santiago de Chile restarted
A strong Brazilian economy is essen- reactivate the economy, some observers international flights in September and the
tial for the health of the whole travel retail believe that next year’s recovery will be program is expected to increase from now
business not only in Brazil but throughout weaker than predicted. until the end of the year. Peru and Colom-
the continent. With consumer spending The travel retail business throughout bia have also confirmed that international
and business investment reduced to the the continent was devastated as soon as services will recommence in October.
minimum, COVID-19 ensured that the airlines stopped flying and airports closed It would seem that with domestic fly-
Brazilian economy shrank in the second down when governments sought to impede ing increasing in most countries (Argentina
quarter. Economists are predicting a 6% the spread of the virus. Land borders were has still to make a decision), the fourth
contraction for the full year; but suggesting also shut and duty free shops and low tax quarter will see a substantial recovery in
that the economy could grow by 3.6% in shops in Brazil, Argentina, Uruguay and airport passenger numbers. Travel retail op-
2021. The next three months will determine Paraguay were forced to close. Some stores erators will see a benefit but in many cases
the accuracy of these predictions. have reopened in Brazil and Uruguay but of reduced salaries and almost nonexistent
Meanwhile, the Brazilian Real has with reduced hours and few customers; savings, it is hard to predict the amount of
slipped to 5.6 to the USD, but constant shoppers are almost exclusively from sister disposable income that will be allocated by
variations in value from 5.3 to 5.9 has towns just across the border. travelers to retail stores in airports, ferries
further depressed duty free spending, espe- Ferry trips were also cancelled -- very and on the borders.
cially in border stores. limited service linking Buenos Aires and There are still too many variables that

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