Air Transport Competitiveness Index in Latin America and the Caribbean 2022

Amadeus and ALTA found that Mexico, Brazil and Panama are the most competitive countries

The number of passengers transported by air fell by more than 90% between March and April 2020 in the region and it is fair to say that few sectors of the economy were equally affected by the pandemic.

Now that the world is beginning to reconfigure itself, it is necessary to have the tools to cement that path, which is why Amadeus and the Latin American and Caribbean Air Transport Association (ALTA) present the Air Transport Competitiveness Index in Latin America and the Caribbean 2022, which, in its second edition, studies the competitiveness of the region and what actions can be taken to generate more attractive conditions to attract investment, as well as facilitate the arrival of tourism in the region of the world with better recovery rates of pre-pandemic passengers.

Amadeus intelligence data, through the Amadeus Demand360® tool, indicates that, in September 2022, 101% of the passenger flow of 2019 was reached, surpassing North America (96%). While some countries in the region have already exceeded their 2019 levels, such as Mexico (14% above their 2019 levels in international passengers), the Dominican Republic (24%) and Colombia (13%). An important part of the recovery of these countries, and of the region in general, was the set of elements such as costs, requirements, prices and accessibility that, mixed together, have catapulted them to the preference of users.

Among the conclusions of the competitiveness index, the three most competitive countries turned out to be Mexico, Brazil and Panama. Mexico stands out for its high level of connectivity and its air transport policy, as well as the markets that a Mexican citizen can access without the need for a Visa. On the other hand, Brazil is very competitive due to the low rate of airport charges. Likewise, it has one of the highest rated civil aviation authorities by the OECD. And Panama has a high connectivity that considers international routes, number of airlines and number of frequencies. In addition, this country has SAF projects and its aviation authority is the third best in the region according to the OECD.

Along with giving this panoramic vision, one of the purposes of the Air Transport Competitiveness Index in Latin America and the Caribbean 2022 is that the actors in this sector can work collaboratively to implement the most competitive measures so that the industry is financially sustainable. , so that more people can make use of air transport and so that the countries of the region benefit from the income and jobs generated directly, indirectly and induced by the sector. To achieve the above, competitiveness in air transport is vital.

For this reason, the factors analyzed in the Index are those that are considered to have an immediate weight and impact on the operation of airlines and on the well-being of the industry in general. These elements are taxes on the ticket price, connectivity, market potential, fuel price, influx of passengers, accessibility through visas, as well as airport quality and costs, among others. Some of the relevant data provided by this study refers to the countries that have recovered more quickly after the pandemic; For example, and according to this index, Mexico is the country with policies that most promoted aviation after the impact of COVID-19, followed by Costa Rica and El Salvador.

Another important indicator to boost the recovery is airport costs. In this category, the lowest cost airport for passengers is Kingston in Jamaica, which charges five dollars. This terminal is followed by Brazil, with several airports whose rate is an average of 11.6 dollars. Passing the range of 20 dollars is Santiago de Chile, which has a rate of 25 dollars and the main airport in Peru, Lima with 28.6 dollars.

The cost of the ticket also represents a vital component, since it is an important “gateway to the countries”. This can be impacted by various taxes and additions, which trigger its value, in this regard, the index highlights Colombia, which currently has a sales tax that was temporarily reduced from 19% to 5% as a measure to promote tourism during the pandemic. As of 2023, this tax will return to its levels of 19%. The study shows that eliminating non-aviation related airfare charges contributes to having a more competitive country, bringing the economic and social benefits that aviation generates for people and for the development of countries.
The Air Transport Competitiveness Index in Latin America and the Caribbean 2022 is a thermometer of the countries of the region and a space to look for opportunities for improvement so that aviation in Latin America and the Caribbean continues its path towards growth so longed for ALTA and Amadeus are convinced of the importance that this sector represents for the economic and social development of this region.
The full index is available here: https://cdn-alta-content.s3.sa-east-1.amazonaws.com/documents/indice-amadeus-2022.pdf

Source: ALTA