IATA urges governments in Latin America and the Caribbean to maximize the economic and social benefits of aviation
The International Air Transport Association (IATA) urged governments in Latin America and the Caribbean to maximize the economic and social benefits of aviation. Aviation currently supports 7.2 million jobs and $156 billion in economic activity across the Latin American and Caribbean region. That represents 2.8% of all employment and 3.3% of all GDP in the region.
“While these are impressive numbers, aviation’s contribution could be even greater. For example, in the Middle East region, air transport supports 3.3% of all employment and 4.4% of GDP. Achieving the same levels in Latin America would mean another 1.3 million jobs and an additional $52 billion in GDP contribution, said Alexandre de Juniac, IATA’s Director General at the Airline Leaders Forum organized by the Latin American and Caribbean Air Transport Association (ALTA).
De Juniac urged governments to focus on enhancing competitiveness and improving aviation infrastructure, while working toward regulatory harmonization across the region.
Competitiveness
“Latin America is a very expensive place to do business. Taxes, fees, and government policies impose a huge burden on airlines and stifle air travel by making it costlier than it would be otherwise,” said de Juniac. For example:
• Brazil’s jet fuel pricing policy inflates airline costs by $255 million annually
• Mexico has a handling fee in the jet fuel pricing formula that adds an extra $45 million per year.
• Peru has a tourism promotion tax on tickets, making it a less competitive destination; and its collection of VAT on overflight charges and international tickets adds to the cost burden while contravening ICAO standards.
• Barbados recently imposed a $70 per ticket tax for long haul flights and $35 for travel within the Caribbean community making it a more-costly destination.
“These are just a few of many examples, all illustrating that too many governments see aviation and air travel as targets for heavy taxes and fees, rather than as a catalyst for economic growth and job creation. That is short-sighted,” said de Juniac…
