Market Trends
Latin America: An aviation mega-region
According to Airbus’ latest Global Market Forecast (GMF), Latin American airlines will require 2,307 new aircraft between 2013 and 2032, with intra-regional routes driving the region’s huge potential for growth. The new aircraft demand includes 1,794 single-aisle, 475 twin-aisle and 38 very large aircraft (VLA) worth an estimated US$292 billion.
The Latin America GMF was revealed during a press conference at the 10th Annual ALTA Leader’s Forum on November 14 in Cancun, Mexico.
Between 2012 and 2020, Latin America’s economy is expected to outperform the world average, largely thanks to Mexico and Brazil’s consumer spending. As a result, traffic growth in Latin America in the next 20 years is expected to outperform the world average of 4.7 percent with an annual growth rate of 5.2 percent.
A growing middle class and increased consumer spending have led to air transport becoming more accessible throughout Latin America in the past 10 years, increasing 14 percent in terms of total number of cities served. Still, while almost 100 percent of the 20 largest cities in North America and Europe connect passengers with at least one flight per day, only 40 percent of Latin America’s top 20 cities do the same. As a result, in the next 20 years, intra-regional and domestic traffic is expected to grow at an impressive rate of 6.3 percent, becoming the biggest market for Latin American carriers.
This untapped intra-regional potential partly explains why Airbus forecasts that in the next 20 years two-thirds of the population in emerging markets will take a trip a year, positioning Latin American airlines to enjoy the second highest traffic growth rates worldwide, after Middle Eastern airlines.
While 10 of the 92 worldwide aviation mega-cities with over 10,000 international passengers a day will be in Latin America by 2032, additional opportunities exist for Latin American airlines to capitalize on. Currently, Latin America’s six largest carriers have 19 percent market share of the region’s long-haul traffic, while regions like North America and Europe enjoy nearly 40 percent.
Another prevalent trend in Latin America is the rise of low cost carriers (LCC), which accounts for nearly 40 percent of the market share of total air traffic in the region, up from just 12 percent in 2003, with Mexico and Brazil representing nearly the entire market. A highly competitive LCC market has led airlines to constantly seek the most efficient aircraft available, largely driving the average age of Latin America’s in-service fleet to 9.5 years, down 42 percent since 2000, as compared to the world average age of 10.7 years.
Nearly 500 industry leaders, airline representatives, and national press gathered at the ALTA Airline Leaders Forum in Cancun, Mexico, to engage in an international dialogue discussing current trends and challenges faced by the aviation industry.
Globally, by 2032 some 29,230 new passenger and freighter aircraft valued at nearly US$4.4 trillion will be required to satisfy future robust market demand. The GMF provides an in-depth look at both passenger and freighter aircraft fleet evolution, passenger and aircraft flows, and world air transport developments of nearly 800 passenger airlines and 200 freighter operators across the world, and the findings for Latin America pointed to the region’s expanding economy, growing middle class, and rise of low cost carriers (LCCs) as some key drivers to this emerging market’s traffic growth rate.
For more information contact:
Liana Sucar-Hamel
Communications Manager, Latin America & Caribbean
liana.sucar-hamel@airbus.com
