Mixed Signals for Latin America's Aeronautics

By Rois-Méndez, Ernesto | Americas Quarterly, Winter 2010 | Go to article overview

Mixed Signals for Latin America's Aeronautics


Rois-Méndez, Ernesto, Americas Quarterly


AVIATION

Even in the best economic times, it is impossible to untangle and interpret the contradictory trends in Latin American aviation. Now, in what is for many industries a time of slow economic recovery, the aviation industry is looking promising. New flight routes, new equipment purchases and higher passenger traffic indicate that 2010 may be a positive year for America's aeronautics industry.

The best example of these confusing trends (and Latin American entrepreneurship) is the unexpected emergence of a tiny airline based in a medium-sized town in the interior of Argentina.

In October 2008, Aerochaco, headquartered in Resistencia, the capital city of Argentina's Chaco province, came back to life after 20 years of inactivity. The airline, founded in the mid-1960s but closed since 1990, enjoyed its comeback at a time when markets had hit bottom, aircraft production had slowed and airlines were reducing their flight frequencies. Aerochaco's secret: an infusion of government and private funds.

Operated by Macair Jet, the airline, as of December 2009, profitably flies two McDonnell Douglas MD-87 and two BA Jetstream 32 aircraft and is the official carrier of Buenos Aires' popular Boca Juniors soccer franchise. Its 29 weekly flights connect three domestic cities, and international flights are offered to Montevideo, Uruguay, and Paraná, Brazil.

The Aerochaco case explains some of the pervading optimism in Latin American aviation. Tracking commercial passenger traffic, the Latin American and Caribbean Air Transport Association (ALTA) shows an unpredictable series of ups and downs from month to month over the course of 2009. ALTA reports an increase in passengers for six months last year but also notes corresponding drops in commercial traffic in four months in 2008. October recorded the biggest monthly passenger traffic increase (13.5 percent), while May showed the biggest decrease (12.3 percent). But the upward trend in passenger movement was expected to continue in early 2010.

Latin American airlines are building on their commercial traffic to try to improve the industry. Last October, ALTA members, representing some 40 airlines and government organizations, issued a set of resolutions for 2010. The top concern was air safety. They agreed to establish a centralized entity to develop and oversee technical certification standards and improve international aviation relationships. Another issue for the Latin American airline industry is the postponement of future fee hikes and non-essential aviation projects "until the industry shows signs of recuperation." Significantly, ALTA members have also pledged to support their commitment to lower aircraft toxic emissions by 15 percent by 2020 and by 50 percent by 2050. …

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