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IATA urges Latin America to take advantage of aviation

By Staff Reports on March 27, 2014

The International Air Transport Association urged governments in Latin America and the Caribbean region to take advantage of the connectivity provided by aviation in order to chart a more successful future.

“Latin America is ripe with possibilities. It has a dynamic airline industry that has embraced cross-border consolidation to boost efficiency and competitiveness and deliver more value to customers. And it has a geography that is particularly reliant on air transport," said Tony Tyler, IATA’s director general and CEO, in the opening address of the Wings of Change conference in Santiago.

IATA said many governments in the region are pursuing policies that treat the industry as a luxury, rather than as a catalyst for economic growth.

“While some countries in the region – such as Chile and Panama – recognize the value of aviation, others are erecting physical and financial barriers to success, ignoring the lessons of places like South Korea, the Gulf or Singapore, which have placed aviation connectivity at the core of their development plans," Tyler said. "Alignment with global standards and practices at the policy and practical level is a key prerequisite for aviation success. It creates the best environment for a healthy, vibrant airline system that can serve as a catalyst for economic development.”

Tyler highlighted the top three priorities for Latin American governments to focus on in order for aviation to reach its full potential in the region: taxes and charges, infrastructure and regulation.

A number of Latin American countries apply taxes on jet fuel for international flights, which deviates from global standards and is in conflict with the Chicago Convention and International Civil Aviation Organization principles. On average, fuel cost in the region is around 14 percent higher than the global average.

As for infrastructure, governments across Latin America are embracing airport concessions and privatizations to speed up infrastructure development.

"It’s no secret that a lack of airport capacity is widespread across the region. In fact, only two economies, Panama and Barbados, rank among the top 35 countries for the quality of their air transport infrastructure, according to the World Economic Forum,” Tyler said. “Creative ways to finance airport development are always welcome, provided they align with ICAO’s policies on charges which make clear that states are ultimately responsible for the economic oversight of commercialized or privatized airports. They must ensure that key charging principles of non-discrimination, cost-relatedness, transparency and consultation with users are followed.”