Commentary: On A Runway To Recovery

We are moving towards recovery and there is a clear path to reach a good altitude, says José Ricardo Botelho, executive director and CEO at ALTA.

Credit: Rob Finlayson

José Ricardo Botelho is the executive director and CEO at ALTA.

After two years of extreme uncertainty and stress, I can now look back with a broader and more positive perspective and see that the forced stop caused by the pandemic gave us the opportunity to take off again with much more resilience while being more people- and environment-focused.

According to our latest report on Latin American and Caribbean passenger traffic, in November 2021, 24.4 million passengers were carried in the region, 30% less than the same month in 2019 and 54% more than the same month of 2020. Of those passengers, 4.6 million traveled to other regions, with 3.6 million traveling to North America (78%).

Those are positive figures, even more so as we know that Latin America and the Caribbean is the second region in terms of traffic recovery, while it was one of the regions with no financial support from governments in 2020.

We are moving towards recovery and there is a clear path to reach a good altitude. However, it is important to point out that the airline industry still faces several challenges. Among them are the uncertainty for planning capacity and networks due to the changing regulations worldwide, and trying to regain passengers’ trust because of imposed fears and costs related to the lack of standardization and predictability.

Studies and data demonstrate that most of the travel restrictions implemented have little or no impact on the spread of the virus, while they do have a profound impact on economies and the wellbeing of the population, as well as on travelers’ confidence. A study conducted by Oxera and Edge Health showed that in the UK the peak of the omicron variant would have been reached five days earlier if border restrictions hadn’t been implemented, and three days earlier in Italy and Finland, demonstrating that border closures do not translate into case reduction or mitigation.

In the countries where restrictions have been lifted, the number of passengers has improved significantly, while countries that switch between closed-open-closed are often perceived as risky, resulting in a decrease in passenger numbers. Passengers have been exposed to the fear of getting infected and the risk of becoming locked out, with the corresponding time and costs involved.

Airlines have worked to help reduce uncertainty regarding risks, for example by changing their policies to allow adjustments in tickets at no costs, but this makes capacity and route planning very complex.

According to Our World in Data, vaccination rates in our region went from 0% at the beginning of 2021 to 77% a year later. We are close to achieving a hybrid immunity because of vaccines and the protection provided by overcoming the virus with the large number of cases due to omicron. This makes us optimistic about reaching our pre-pandemic levels this year if governments do not impose further restrictions.

The Latin American region will be one of the fastest-growing and we have an industry prepared to meet this growth. Collaboration has always been and continues to be key. We have big targets to achieve the recovery and continue on a growth path that is responsible for the planet and the people, and airlines cannot and should not do this alone.

The entire value chain is involved and at ALTA we have a role in helping all these parts communicate and collaborate in efficient ways. Our role is to connect the industry with governments in the region to speak the same language and realize that our goals are the same, but we must align in the process. Aviation is no longer a luxury service but the most efficient and safest mode of transport for the population, which in the process generates an important number of jobs and economic opportunities.