airline industry

Published on May 18th, 2012 | by Mark Chesnut

Is Less Regulation the Key to Airline Growth in Latin America?

Making connections: El Dorado International Airport in Bogota, Colombia. Photo: © Mark Chesnut



BY MARK CHESNUT


I recently wrapped up covering the Americas Summit, a major conference organized by the World Travel & Tourism Council that took place at the Grand Velas Resort on Mexico’s Riviera Maya. This is one of my reports from the event. 


Connectivity is key to further growth in the travel and tourism segments, and “open skies” — the international policy concept that liberalizes rules and regulations — is an important tool for achieving this goal, according to delegates speaking during a session called “Opening Skies Means Opening Up for Business.”
Taking place during the World Travel & Tourism Council’s Americas Summit in Mexico’s Riviera Maya, the session was moderated by Arnie Weissmann, editor in chief of the U.S. edition of Travel Weekly, and included commentary from Boubacar Djibo, director of the Air Transport Bureau of the International Civil Aviation Organization, and, Wykeham McNeill, Jamaica’s minister of tourism and entertainment.

“One of our biggest challenges is the fragmentation that we have,” said Alex de Gunten, executive director of the Latin America and Caribbean Air Transport Association. “We find in the region that there are a lot of barriers.”

One response to fragmentation is merger. Speaking about the pending fusion of LAN and TAM, which when complete will create Latin America’s largest airline company, De Gunten said that consolidation is “something that’s been happening for a long time” in the region. “TACA started this 30, 40 years ago,” he explained. “Today, you see it continue. It’s a necessity. If you’re going to reduce cost and compete, you have to do that.”

“True ‘open skies’ is a utopia,” according to Jeff Poole, director of government and industry affairs at the International Air Transport Association — but it’s a complex issue, he added. “Any change in aviation, as in any industry, brings winners and losers. Most businesses would prefer to have a slightly dysfunctional marketplace, but one that they understand. If you take away the rules … I start from square one along with everyone else.

“If you’re increasing the market, then there is room for everybody.”

A big challenge to increasing connectivity around the Americas, according to Poole, is regulation. “We need governments to get out of the way with overtaxing and over-regulating,” he told delegates.

De Gunten agreed. “They think aviation is a luxury,” he said, referring to what he said is the attitude of some governments toward air travel. “They put taxes on tourists who arrive, and on the airports.” Governments also should be aware of potential problems with the airports themselves, he added. “Infrastructure right now is one of our largest problems. Forget about ‘open skies.’ We need a place to land these airplanes. Of every three flights that depart out of Latin America, one departs out of a congested airport.” 


MORE TRAVEL NEWS & TIPS
• Public-Private Cooperation, Visa Waivers are Key for Tourism Growth (my report from the World Travel & Tourism Council’s Americas Summit in the Riviera Maya)
• Get more action. Subscribe to the LatinFlyer channel on Youtube!

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About the Author

The founder and editor of LatinFlyer.com, Mark has more than 15 years of experience as a writer, editor and manager. He's worked with some of the biggest consumer, in-flight and travel trade publishers that cover Latin America.


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