ALTA new leader opens up on region's aviation trends, challenges and opportunities

Luis Felipe de Oliveira was appointed Executive Director of the Latin America and Caribbean Air Transport Association (ALTA) in November 2017. Airbus sat down with the new leader of the private, non-profit organization to get his insight on challenges, trends, and lessons learned in the industry today.

1. What has surprised you the most about the region since taking the helm at ALTA?

When I joined ALTA, I was surprised to see the great potential we have in the region. Latin America and the Caribbean has the youngest and most efficient fleet in the world, with over 50 percent of tourists arriving by air to our countries—contributing with USD $167 billion to the region's GDP—and an expectation to double traffic in the next 10 years.

Also, Latin America and Caribbean passengers are flying a third as much as Europeans and a quarter as much as Americans per year. This is a good problem to have, but we still have a lot of obstacles to overcome.

Infrastructure in the air and on the ground still needs a lot of investment to cope with growth; taxes and airport fees are among the highest in the world; regulatory frameworks differ in each country and are most of the time incompatible; and to make our mission even more challenging, our region has one of the highest fuel costs in the world.

2. What is the most pressing challenge you have discovered and what is your plan to address it?

High costs. Our industry is very sensitive to cost. Cost reductions translate into lower fares, increasing passengers' access to air transport, which is highly needed considering the vast geographical area covered by our region.

For example, thanks to concessions and private investment, airports today are better than they were 10 years ago. However, this growth came at a very high cost, and resources generated by aviation are not being reinvested in the industry. Governments continue using airport concessions as a source of revenue, and we see scenarios such as with El Dorado Airport in Bogota, Lima and Santiago de Chile, which concede, respectively, around 46, 47, and 76 percent of their gross income to the government. This limits the industry and prevents it from reaching its full potential.

We are working closely with governments to raise awareness on the benefits the aviation industry brings to countries, from economic to social development, tourism, jobs creation and strengthening of GDP. As governments understand the importance of aviation and its contribution, the more we can work together in better conditions for the industry.

Another issue we see is high fuel costs due to monopolist supply systems. We have very high taxes on fuel in some locations for international flights and in some domestic markets as well. To address this, we are focusing on fuel costs and infrastructure from Mexico to Argentina, and we are also advocating against any kind of new taxes or fees proposed by governments, airports and ANSPs. ALTA's recently-created Fuel Committee is bringing airlines, suppliers, airports and governments together to discuss opportunities to bring efficient competition, achieve lower costs and increase capacity to meet the growing demand.

In parallel to these initiatives we keep Safety as our number one priority and we are working very close with IATA, ICAO, airports and governments to improve the region's safety standards.

3. Given your background in airport infrastructure and fuel, what do major airports like MEX, GRU and EZE need to do to achieve greater success as international aviation hubs?

Latin America and the Caribbean covers more than 22 million square kilometers—a huge expanse. Better infrastructure is needed as passengers are already exceeding capacity at many airports which are still poorly connected.

The new Mexico City airport is a priority for the country considering its high congestion, and it promises to leverage the full potential of Mexico City as an important hub. Mexico is also working on opening access to fuel facilities that will help airlines operating in this market curb operating costs and ultimately boost competitiveness.

As for Brazil, it is recovering from a long economic crisis, and the economic growth could add some infrastructure pressure to Sao Paulo and domestic airports, given the huge Brazilian domestic market.

The case of Argentina is similar. After years of lack of investment, Buenos Aires' airport is starting to improve its facilities. However, it could become congested if it is unable to keep up with fast growth that comes with new airlines operating in the country.

I believe airport privatization is a positive initiative, as it drives competition and, with efficient regulations, can boost the full development of these three hubs.

4. What can Airbus as an aircraft manufacturer do to help?

By offering fuel-efficient and modern aircraft that provide airlines operational benefits, Airbus is already a key contributor to the success of aviation in the region.

I think Airbus could play a bigger role in championing alternative fuel campaigns to reduce the industry's carbon footprint. Also, we'd like to see Airbus developing an effective way to finance the number of aircraft needed in the region to achieve aviation's full potential. ALTA would be eager to support these projects.

5. What else would you like to share with the readers of Noticias Airbus?

ALTA is now in a new era. By moving our headquarters to Panama, where almost all the countries we serve are only one flight away, we will be closer to our stakeholders and members, demonstrating the importance of connectivity that we advocate.

The aviation industry directly impacts economies, and ALTA's main role is to support the development of the entire value chain of the air transport industry in the region to benefit countries, aircraft manufacturers, airports, governments, airlines, suppliers, and most importantly, the communities served by air transport.

To learn more about ALTA click here: https://www.alta.aero/