Business
Latin America’s stricken airlines facing long haul to recovery
Latin America’s beleaguered airlines will take up to three years to recover losses due to the coronavirus pandemic, and in the meantime desperately need government help, according to experts surveying the damage to the industry.
The International Air Transport Association (IATA) estimates it will take at least that time for the region’s airlines to inch back to their pre-pandemic level for domestic and regional flights.
Long-haul services to the United States and Europe will take until 2024 to come back, it says.
“It’s a long-range view; it will not be short term. It will take a lot of work,” said Peter Cerda, IATA vice president for the Americas.
Evidence of the severity of the crisis came last week when the region’s two largest airlines, Chilean-Brazilian LATAM and Colombia’s Avianca, filed for bankruptcy in the United States.
With countries across the region in lockdown, flight activity has plummeted 93 percent from around 200,000 a day, with losses in revenue estimated at $18 billion.
Cerda says that figure is likely to increase.
The IATA official says the impact to the industry is even worse than the aftermath of the September 11, 2001 attacks on the United States.
“We are going to have airlines that are not going to be able to recover, that will have to shut down their operations for good,” he said.
After almost three months of lockdowns and restrictions on movement across the region, airlines have run out of cash and government support is “urgent,” he says.
‘Not a rescue’
“What we are asking for is not a financial rescue. It’s support, immediate relief that allows the industry to sustain operations,” said Cerda.
Airlines are seeking tax relief and credit guarantees from governments.
Globally, government aid to the airline sector stands at $123 billion, including $300 million from Latin America, according to IATA.
“Airports and airlines as well as governments are all losing out at this juncture,” because of the lack of connectivity across the continent, says Fernando Gomez Suarez, an aviation industry analyst in Mexico.
Governments are conscious of the broader effects and Chile is considering a bailout for LATAM, seeing the airline as vital to the economy, and seeking to preserve 10,000 direct jobs as well as the livelihood of up to 200,000 people the government says are dependent on the airline indirectly.
The company has already cut 1,800 of its total 42,000 staff.
The company is also holding discussions with the governments of Brazil, Peru and Colombia to save jobs there.
Negotiations
In Brazil, the largest internal market in the region with 90 million passengers a year, private banks headed by a development bank have granted a $1.1 billion loan to its three largest airlines — Gol, Azul and LATAM.
Gol and Azul first had to agree to cut executive salaries and provide special rates and packages to stimulate recovery.
In Mexico, the region’s largest destination for foreign tourists, Tourism Minister Miguel Torruco insisted his country would continue to have “strong, solid airlines.”
IATA said talks are underway with the government to reduce airline charges.
The country’s largest, Aeromexico, will resume some routes starting Monday, though ratings agency S&P lowered its credit rating this week due to the possibility of its debt being “unsustainable.”
In Argentina, state-owned Aerolineas Argentinas announced a merger with its subsidiary Austral this month to reduce infrastructure and staff to save up to $100 million.
IATA meanwhile warned about the impact of the government’s decision to keep Argentina’s airspace closed until September.
Keep flying
Airline workers who escaped mass layoffs have had to take full or partial wage cuts to keep their jobs.
“Imagine losing half or more of your salary… and the bills keep coming in,” says Jose de Jesus Suarez, spokesman for the Mexican pilots union ASPA, whose members have gone from six flights a week to just one or two a month.
Analyst Gomez Suarez says the markets left vacant by stricken airlines will quickly be absorbed by others.
And he says their most urgent challenge will be to harmonize new health protocols between countries, which will mean higher costs for passengers.
“People will keep flying. Of course, they will have to change their habits and customs.”
Reporting and photos: AFP
Maldives on Thursday welcomed the one millionth tourist to visit this year.
The one millionth tourist is a Thai named Sutapa Amonwivat, who arrived from Singapore with her husband and two children. This is her second visit to Maldives.
Maldives Marketing and Public Relations Corporation (MMPRC) and the Ministry of Tourism gave a warm welcome to Sutapa at the Velana International Airport (VIA) Thursday afternoon. She was welcomed at the VIA by tourism minister Ibrahim Faisal, MMPRC Managing Director Ibrahim Shiury and senior officials of various relevant agencies.
After welcoming her with traditional offerings, she was presented with various gifts by the ministry, MMPRC, customs, immigration, Maldives Association of Travel Agents and Tour Operators (MATATO) and Trans Maldivian Airways (TMA).
Maldives reached one million tourists in June, three weeks earlier than last year. The number of tourists reached one million on July 16, 2023.
Maldives expects to reach 2 million tourists this year.
Chongqing Airlines on Monday began its inaugural flights to Maldives.
The Chongqing-Male route, scheduled three times a week, is expected to strengthen the bonds between China and the Maldives, opening up exciting new opportunities for tourism and cultural exchange.
The inaugural flight was welcomed upon its arrival at Velana International Airport (VIA) in Maldives, where local officials and tourism representatives expressed their enthusiasm for this new development.
“We warmly welcome our friends from China to our beautiful islands. This new connection strengthens our bonds and opens up new opportunities for tourism,” the tourism ministry said on X.
Maldives currently welcomes four airlines from China, including China Eastern, Beijing Capital Airlines, Xiamen Airlines.
In January, Maldives government urged tourism stakeholders in both Maldives and China to ramp up efforts to restore China’s position as the primary source market for Maldives tourism, a status held before the onset of Covid-19.
China, being the largest source market for Maldives tourism before the pandemic, saw a resumption of tourist arrivals from January 2023 after a three-year hiatus due to the pandemic. In 2023, the Maldives welcomed 187,118 Chinese tourists, marking a significant recovery in numbers. This year, the Maldives has welcomed the most number of tourists from China, with over 107,940 or 11.5 percent of total arrivals by June 12.
CROSSROADS Maldives has introduced WeChat Pay, widely known as Weixin Pay in China, across its world-class resorts, SAii Lagoon Maldives, Curio Collection by Hilton, and Hard Rock Hotel Maldives. This payment option is made available to enhance the convenience and overall experience for guests from China, making their stay in the Maldives more enjoyable and hassle-free.
Understanding the needs of the diverse guests, CROSSROADS Maldives has integrated WeChat Pay into operations, allowing guests from China to easily and securely conduct transactions using a payment method familiar to them. The introduction of WeChat Pay is a testament to CROSSROADS Maldives’ dedication to enhancing guest satisfaction by offering exceptional experiences at every turn. What is also expected through this initiative is that the guests could benefit from better foreign exchange rates, translating to better savings on their expenditures during their stay.
The option is available for guests in-house conveniently at both resorts as well as across the Marina at CROSSROADS Maldives where a wider variety of unparalleled dining and retail experiences are available for all guests. The day visitors from China will also therefore equally benefit from this new introduction at the Maldives’ premier multi-island integrated leisure destination.
SAii Lagoon Maldives, Curio Collection by Hilton, is a vibrant tropical escape that offers unique and locally inspired experiences. The resort features spacious rooms and villas, a variety of dining options, and an array of recreational activities designed to cater to the desires of modern travellers. Guests can escape to the island’s SAiisational natural beauty, enjoy water sports, and indulge in spa treatments, all while relishing the personalised service that defines Hilton’s Curio Collection.
Hard Rock Hotel Maldives brings the iconic Hard Rock spirit to the tranquil shores of the Maldives. This family-friendly resort offers a perfect blend of relaxation and entertainment, featuring music-inspired experiences, live performances, and the brand’s signature amenities. With luxurious accommodations, diverse dining options, and a plethora of activities for all ages, Hard Rock Hotel Maldives ensures an unforgettable holiday experience for every guest.
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