Airlines in Latin America Face Tax and Travel Ban Challenges in Pandemic

Latin American airlines experienced an 86% year-over-year fall in demand in October, but this is an improvement over September, when the region reported a 92% drop in demand, the International Air Transport Association (IATA) said.

Overall, October travel was down almost 41%, with what little recovery seen in the region driven mainly by domestic demand, Peter Cerdá, IATA regional vice president for the Americas, told reporters.

“Brazil being the sixth-largest domestic market globally saw demand drop by 44.5%, as compared to 2019,” Cerda said. “Along with the domestic airlines in Mexico, those in Brazil have stayed the strongest recovery, with some operating closer to their pre Covid-19 levels on domestic flights.” 

The world’s airlines are having difficulty navigating the patchwork  of international restrictions, border closings and government regulations, a problem especially acute in Latin America. Regulations continue to change along with the trajectory of the pandemic.

In Peru, for example, the government is allowing international travel to resume on Dec. 15 for longhaul flights of more than eight hours to cities in Europe, including Amsterdam, Paris, Barcelona and Madrid, IATA said.

In Nicaragua, to cite another example, IATA said the government has not adapted to international protocols, and airlines have deferred their restart dates.

International travel is beginning to recover in the Caribbean, but IATA warned of the increase in taxes in the region. “The industry is being inundated with proposed increases from several island states across the Caribbean, making it, making a costly region, even more expensive than it was before to visitors,” Cerdá said.

The Bahamas will be implementing an increase in overflight fees in addition to charging $40 per person for travel insurance. Cuba added a sanitary fee of $30 per person, while Jamaica introduced a $40 per person charge on travel insurance and as of this month, Grenada is proposing the introduction of a COVID-19 security charge of $150 per ticket.

“We have appealed to the various governments to reconsider these increases and rather support aviation recovery through market stimulation that can generate traffic, thereby reducing the debt burden on carriers and supporting a faster recovery of the industry,” Cerdá said.