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Latin America’s stricken airlines facing long haul to recovery

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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.

An Aeromexico airlines plane lands at Mexico City’s Benito Juarez airport on May 20, 2020. PHOTO: AFP / PEDRO PARDO

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’

A hall at Benito Juarez International airport in Mexico City on May 20, 2020. PHOTO: AFP / PEDRO PARDO

“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.

Passengers at the Avianca check-in area in Mexico City’s Benito Juarez airport International airport on May 20, 2020. PHOTO: AFP / PEDRO PARDO

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.

Latin American airlines face $15 billion in losses over the coronavirus pandemic. PHOTO: AFP / PEDRO PARDO

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.

LATAM airlines aircraft sit on the tarmac at Santiago airport. PHOTO: AFP / MARTIN BERNETTI

“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

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Weixin Pay supported to boost Chinese tourists to Maldives

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On May 27, Zihuny Rasheed, Deputy Managing Director of Maldives Marketing and PR Corporation (MMPRC/Visit Maldives), and Etienne Ng, Weixin Pay’s Country Manager, Singapore and Regional Director, Southeast Asia, WeChat Pay, signed a three-year Memorandum of Understanding (MoU) during ITB China 2024, pledging to support more Maldivian merchants to accept WeixinPay to provide Chinese tourists with a convenient payment experience. Visit Maldives is the Official Destination Partner for this year’s edition of ITB China.

“China is a key source of tourists for the Maldives, and we greatly value the experience of Chinese visitors,” said DMD Zihuny Rasheed. “We plan on promoting the acceptance of Weixin Pay throughout the country, offering Chinese tourists the payment option they are familiar with and prefer. I have used Weixin Pay during my visit to China via linking an international card, and I can attest to the convenience of the mobile payment option.”

Ibrahim Faisal, Minister of Tourism of the Maldives, expressed his support, “Excited that we’re introducing Weixin Pay for Chinese visitors, which is another step in establishing Maldives as their top destination. Now, it’s easier than ever for Chinese travellers to enjoy their stay, hassle-free. We look forward to further enhancing their experience,” he wrote.

According to Etienne Ng, Weixin Pay is currently being piloted at the country’s airport duty-free store, as well as in popular restaurants like Sala Thai and City Garden. Additionally, a range of hotels and resorts are participating including, JEN Maldives Malé by Shangri-La, Adaaran Select HudhuranFushi, Adaaran Club Rannalhi, Adaaran Prestige Vadoo, Adaaran Prestige Water Villas, Velaa Private Island, Cheval Blanc Randheli Private Island, Dhawa Ihuru Maldives, Ayada Maldives, Marriott Bonvoy, Banyan Tree Vabbinfaru, Conrad Maldives Rangali Island and Angsana Velavaru in Maldives with strong support from the Bank of Maldives and local merchants. Making smooth progress, the initiative is expected to have 8,000 merchants nationwide that integrate the payment option.

“Weixin Pay is committed to providing users with safe and convenient payment services. Since the visa exemption policy was implemented, more and more Weixin Pay users have chosen to travel to the island country. Through our cooperation with Visit Maldives, we aim to provide Chinese users with the same convenient experience in the travel as they experience at home,” he said.

In February 2023, an Agreement on Mutual Exemption of Visa Requirements signed between the Maldives and China took effect as China expands its visa-free policy to benefit more countries. Consequently, the Maldives has consistently ranked among the top overseas destinations for Chinese tourists during popular travel periods such as the May Day and National Day holidays.

According to data from Visit Maldives, the country welcomed over 1.8 million tourists in 2023, a new national record. The Chinese market has been a key source market for the Maldives. As of 11th May 2024, it is the number one source market with 91,073 tourist arrivals.

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Indian influencer Niki Mehra in Maldives

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Maldives Marketing and Public Relations Corporation (MMPRC/ Visit Maldives) hosted a familiarisation trip with Amilla Maldives for high-end influencer, Niki Mehra, from India to experience the luxury and romantic offerings of the Maldives from 3rd – 6th May 2024.

The familiarisation trip was a great opportunity to Niki Mehra, a renowned Indian model, fashion, beauty and travel content creator and social media influencer with over half a million followers who has carved a niche in the Indian fashion industry with her unique sense of style. During her time in the Sunny Side of Life, Niki Mehra showcased luxury to romantic experiences of the destination.

The trip promoted Maldives through social media platforms of Niki Mehra while highlighting experiential itinerary offerings of the Maldives. Additionally, the influencer trip assisted MMPRC in propelling growth in the luxury travel segment and honeymoon market by showcasing the Maldives as a premier honeymoon destination for the Indian travellers.

The Indian market has been a strong market for the Maldives over the years, currently ranked number 6 with 46,970 tourists as of 13th May 2024. Additionally, MMPRC showcased the Maldives in OTM and SATTE held earlier this year. MMPRC is committed to boosting the arrivals from the market and has exciting marketing activities planned for future, including joint campaigns, familiarisation trips, participation in major events and other campaigns which provides numerous opportunities to showcase the breathtaking Maldives to the market, attracting more Indian travellers.

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130 hotels in The Prestige Collection with 4 Maldives properties

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The Prestige Collection has reached 130 hotels in its portfolio, continuing to uphold quality and excellence as core pillars. It represents the most exclusive selection within Keytel, the world’s first alliance of independent hotels.

Since its establishment in 2007, The Prestige Collection has been dedicated to meeting the growing demand for luxury hotels, becoming a reference for hospitality industry specialists. Despite its focus on independent hotels, the collection has successfully attracted prestigious properties from international luxury chains such as Rosewood Villa Magna, Mandarín Oriental Ritz Madrid, and Fairmont Mayakoba in Riviera Maya. These hotels view The Prestige Collection as a complement to their commercial strategy for attracting luxury clientele.

With a prominent presence both nationally and internationally across 36 countries, The Prestige Collection shines in with four distinguished resorts: Baglioni Resort Maldives, Diamonds Athuruga Maldives Resort & Spa, Diamonds Thudufushi Maldives Resort & Spa, and Hideaway Beach Resort & Spa. Internationally, the collection boasts emblematic properties like Armani Dubai, Café Royal in London, The Pierre in New York, and Kappa Senses in Ubud, Bali, among others.

The collection categorises hotels into four distinctive categories, highlighting ideal places to disconnect, properties in vibrant urban settings, coastal options for those seeking serenity, and unique experiences for those seeking singularity.

Furthermore, this milestone coincides with the relaunch of its new experiential website platform. This platform offers users and industry professionals the opportunity to explore the collection in greater detail and drives qualified traffic to the official websites of member hotels.

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