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The continued shutdown of Latin America and Caribbean is hurting regional airlines
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The continued shutdown of Latin America and Caribbean is hurting regional airlines

With COVID-19 infections accelerating, the majority of Latin America and Caribbean countries still closed to commercial travel, and Europe imposing travel restrictions, the tourism and aviation industry risks losing millions of jobs and seeing more airlines filing bankruptcy, two leading industry organizations say.

On Thursday, the International Air Transport Association and the World Travel & Tourism Council called on regional governments not to abandon the airline industry in the midst of the global coronavirus pandemic. They also reiterated demands for financial support for regional carriers, and a clear restart dates for commercial travel from regional governments.

“We need governments to support and strengthen the restart by quickly implementing the International Civil Aviation Organization’s global guidelines for restoring air connectivity,” said Alexandre de Juniac, director general and CEO of International Air Transport Association.

The push for Latin America and the Caribbean to reopen their airspace comes amid a resurgence of coronavirus infections, which have made the region the new epicenter of the deadly respiratory disease with at least 100,000 new cases being registered a day, the Pan American Health Organization said this week.

Fearing that the number of new cases will not go down for several weeks, many governments have pushed back restarting domestic and international air travel, which tourism and aviation experts say will not help their industries’ recovery.

“This pandemic is affecting five times what was affected in the [2008] financial crisis, which is absolutely traumatic,” said Maribel Rodriguez, a senior vice president for the World Travel & Tourism Council.

Rodriguez, who has been advocating for the removal of travel restrictions, said the tourism-dependent Caribbean risks losing anywhere between 1.6 million and 2 million tourism-related jobs, while Latin America could lose as many as 6.1 million.

Peter Cerdá, the International Air Transport Association’s regional vice-president for the Americas, said that in the last two weeks several regional carriers have applied for financial restructuring under Chapter 11, and many more could do the same.

“The impact the virus is having on the air transportation system is exacerbated by the uncertainty of the dates for the reopening of the operations in some countries coupled with the lack of clear measures to support the sector,” Cerdá said. “This combination is jeopardizing thousands of jobs and contributions to the [gross domestic produce] in our region.”

In March, as the virus began to spread, most countries in the Americas quickly responded by shutting down their land, sea and air borders. In some cases, not even stranded nationals were allowed to return.

The decision undoubtedly bought time and allowed nations to prepare their health systems to confront COVID-19. But it also decimated economies as countries closed schools, imposed 24-hour lockdowns and grounded commercial flights.

Last month, several countries in the Caribbean, where the virus has been mostly contained in the former British colonies, began reopening their airspace. But the majority of borders remain closed in South and Central America, where leaders are continuing to see climbing infections and deaths.

Cerdá said that globally the aviation industry is expected to suffer a net loss of $84.3 billion this year. For Latin America and Caribbean airlines, where there has been a 98.1 percent drop in demand for air travel, the expected loss for airlines is $4 billion.

“For Latin America we now predict that $98 billion of GDP supported by air transport is at risk along with 4.1 million jobs,” Cerdá said. “We are expecting revenue losses of between 52 to 81 percent as compared to 2019 in the many markets.”

A big chunk of that will come from the currently cut off trans-Atlantic market, a key revenue earner for many airlines in the region…

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