Putting Latin America on the map

“The airline landscape in Latin America and the Caribbean has shifted dramatically,” says Peter Cerda, IATA’s Regional Vice President for the Americas. “Previously, airlines were regularly adapting to governmental changes, few of which were aviation friendly. But following a mix of restructuring through Chapter 11 and consolidation, airlines are now better positioned and better structured than a decade ago. They are now competing on a global scale.”

Latin American airlines posted an 8.6% traffic rise in 2025 over 2024. The reliability and growth can be seen in all the major airline groups in the region. And consolidation is still ongoing as evidenced by the creation and growth of the Abra Group, as well as the planned merger of Viva and Volaris in Mexico. New market entrants, including JetSMART and AraJet, further enhance consumer choice and underscore industry confidence.

Cerda also notes the significant interest in Latin America from international carriers. Iberia has a record number of flights into the region, for example, and other European and Middle Eastern carriers are adding destinations, establishing São Paulo, Bogota, and Panama as points of entry. There is even a direct flight connecting China with Argentina via New Zealand.

WestJet and Air Transat, meanwhile, are expanding their reach into the region, with new services into Central America and Brazil from Canada. Along similar lines, Air Canada is expanding its presence, including the resumption of services to Brazil, Chile, and Peru. “Canadian airlines have seen an opportunity and are going further south than the Caribbean or Mexico,” says Cerda.

Service from the United States remains strong and there are multiple deals between US and Latin American carriers. This has seen an increasing number of flights to secondary airports.

It’s not just passenger traffic. Cargo operations are also expanding, with approximately 98% of flowers produced in the region exported—just one example among numerous strong exports.

“The region has been discovered,” says Cerda. “And why shouldn’t it be? It is rich in culture, ecotourism, beaches, and history. And it is also enjoying solid economic growth.”

Indeed, several countries have moved to more liberalized, pro-business policies, including Argentina, Bolivia, Chile, Ecuador, El Salvador, and Guyana. The result is more competitive airlines that, in turn, are spurring greater connectivity and further economic growth in a virtuous circle.

From 2014-2024, regional airfares are down 47%, connectivity is up 18%, and available seat kilometers are up 38%.

The pros and cons of Brazil
It is not all plain sailing, however. Brazil illustrates the numerous challenges that still lurk behind the tremendous opportunities.

The demand for domestic service in Brazil is strong, with more than 100 million passengers in 2025. There were also 9 million international tourists enjoying better tourism infrastructure and security. Without headwinds, there is no reason why these figures shouldn’t double in the coming years.

But this must be put into context. Some 60% of the 9 million tourists were Argentines. Compare this to the likes of Spain, a country that had 92 million international visitors in 2025. Given Brazil is approximately the size of the European Union, 9 million is a drop in the ocean.

“And then there’s cost,” says Cerda. “The local pricing mechanism for jet fuel artificially inflates the costs for a locally produced commodity, in addition to taxation for domestic consumption. Air traffic control charges are also the highest in the region. And a proposed 26.5% VAT on air tickets, if enacted in 2028, could result in a projected 30% reduction in demand, according to IATA estimates.”

Brazilian litigation, meanwhile, stemming largely from minor passenger claims due to ambiguous rulings, has become notorious. There is roughly one claim per 200 passengers in Brazil compared with approximately one claim per 1.25 million passengers in the United States.

Overall, in the 2014-2024 period, though many countries in the region have almost doubled their trips per capita, in Brazil the number has flatlined.

Making secondary airports work
Infrastructure also needs to step up. Cerda says that some 50% of airports in the region are congested or severely congested. Although part of that reflects the enormous demand for air travel, it does also reveal a lack of planning.

“New terminals have been built, but they get saturated quickly because the capacity is taken up immediately,” says Cerda. “We have seen that in Santiago and Lima. Other airports like Sao Paulo’s Guarulhos and Congonhas airports are suffering because they lack more infrastructure.”

In Lima, the new terminal was six months late in opening and there is now a mandatory International Transfer fee (TUUA). São Paulo has something similar although it is less expensive than the Peruvian fee. In the case of Lima, route cancellations and shifts in connectivity indicate the operational impact with the broader economic consequences yet to be measured.

Not only is more capacity needed at key hubs but also at secondary airports in Chile, Colombia, and Peru. These countries need to develop second-tier gateways to support their own demand and additionally provide relief to hubs.

This requirement has brought some surprising competition to the fore. Caracas in Venezuela has a significant opportunity, according to Cerda. Airlines are looking to reinitiate service as the country stabilizes. There will need to be the right regulatory framework in place, but Cerda says Venezuela and Caracas will become competitive in the market with sufficient support.

One stop
Other priorities in the region reflect global stories. The supply chain issues are hurting carriers in Latin America and the Caribbean as much as airlines in other regions.

Volaris has about 34 planes grounded, for example, a situation that is expected to continue. An airline that was in a notable growth mode has been correspondingly constrained.

Sustainable aviation fuel (SAF) is another strategic focus. The region has huge potential to produce SAF and Cerda believes it could even become a global leader with supportive policies and investment. Certainly, there is an abundance of feedstock and, with aviation strengthening, there will be abundant demand.

“Latin America and the Caribbean is now a global destination,” concludes Cerda. “We see exceptional prospects in business and tourism, alongside increasing global connectivity. Today, it typically requires only one stop to access any part of the world.”