Aviation in Latin America 2022: A Balance

El Dorado Airport, Bogotá

2022 is almost coming to its end and the time to take a pause to start reviewing what this year has left to the industry is getting closer. After two years of crisis, it can be said that things have returned to normal in almost every corner of the world. People are eager to fly again and the images of almost deserted airports are now a bad memory. Given this current scenario, the purpose of this article is to provide an overview of what 2022 meant to the aviation industry in Latin America.

As an introduction (this was mentioned in a previous article in May), and according to the Latin American & Caribbean Air Transport Association (ALTA), the projections were not very optimistic. Due to all the harsh flight restrictions imposed by the governments of the region, the passengers rate dropped to 90%. This data foresaw the industry would not be totally well until 2025, and there have been factors that have affected the industry this year, such as the increasing costs of fuel and the depreciation of Latin American currencies against the dollar, posing issues for the purchasing of parts and supplies.

Despite these challenges and forecasts, the zone has been reaching good numbers at a very good speed, even to almost pre-pandemic levels. ALTA has highlighted in their flight traffic report for August 2022 that activity has reached 92.3% of the levels recorded back in August 2019. This makes Latin America the fastest-recovering region in the world, followed by Africa (85%) and North America (84%). As well, the Revenue Passenger Kilometers (RPK) metric has increased 88.9% compared to 2019 figures.

With regard to international flights, these are the countries which have experienced a considerable growth compared to 2019: Dominican Republic (20%), Colombia (19%) and Mexico (8%). Domestic flights, which were not affected by restrictions, have been growing steadily. In this regard, Colombia also is part of the group of countries with a high rate of domestic flights, with 14% above 2019 levels. Mexico is in second place, with 9% above of its pre-pandemic levels. In addition to this, and as José Ricardo Botelho, executive director of ALTA put it, the geography and the lack of railways make air transportation safe and efficient, making it a crucial part of the economy of the region. All these circumstances have just contributed to the comeback of the industry.

Another behavior which is part of the overall recovery of the Latin American industry is that airlines are looking to fortify their fleets. Taking advantage of the lifting of flight restrictions, companies are actively taking action to remain competitive in the future. They are doing this by acquiring latest generation narrowbodies, as these aircraft are fuel-efficient and help to lower unit prices. In some cases, those airplanes will allow airlines to compete with low-cost operators.

Last but not least, international aviation organizations have noticed that Latin American airlines’ quality standards have been improving in 2022. As proof of this, in September of this year, World Travel Awards were awarded 10 Latin American companies, due to their excellent service.

In conclusion, and as the data shows, there are still reasons to be optimistic about the good health of the Latin American aviation industry. It’s undeniable the market will take a long time to achieve a sound condition after such a strong crisis, but even if this process is complex, there are promising elements that tell us it is going down the right path.