Boeing sees LatAm air travel taking off as regulations ease, incomes rise

Controladora Vuela Compania de Aviacion SAB de CV

11/10/2022 23:35

By Kylie Madry
       MEXICO CITY, Oct 11 (Reuters) - U.S. planemaker Boeing
Co  BA.N  sees travel in Latin America ramping up more quickly
than in other regions as countries loosen regulations and
household incomes rise, the company's regional analyst said on
Tuesday.
    Boeing expects Latin American air traffic to grow an average
of 4.4% annually over the next two decades, surpassing the 4%
growth it forecasts for the industry worldwide, helped by a
trend towards more liberal policies over the next 10 years.
    "We see liberalization not only as an engine of growth for
the industry, but also as a great way to democratize air travel
and make it accessible for a larger number of people," David
Franson, the company's regional director of market analysis,
told Reuters.
    Franson said a trend toward looser state control had already
helped develop a network of low-cost carriers in the region,
adding more routes in Latin America.
    Low-cost carriers such as Argentina's Flybondi and Chile's
JetSmart have already found a foothold, while Mexico's Volaris
has focused on a strategy of so-called "bus-switching,"
targeting traditional bus users who previously could not afford
pricier plane tickets. 
    Airlines across Latin America have added 200 net airport
pairs to their networks over the past 10 years, he said.
    While some countries have been hesitant to give airlines
free rein due to concerns over economic competitiveness, labor
standards and the environmental impacts of air travel, the move
towards liberalization started decades ago by the United States
and Europe is expected to keep up, Franson said.
    "If this continues, we can expect to see a lot more in the
way of those direct connections on relatively short-haul
routes," said Franson.
    Boeing said it a July report Latin America will need 2,240
new aircraft and will have to train 118,000 new crew members and
technicians over the next 20 years to meet growing demand.
 (Reporting by Kylie Madry; editing by Richard Pullin)
 ((Kylie.Madry@thomsonreuters.com;))