Aviation in Latin America and the Caribbean: Operational Challenges and Positive Outlook for Growth in 2022 and Beyond

With the participation of Albert Pérez, SVP of Maintenance of Avianca, Carlos García Martín, Partner of Oliver Wyman, Diego Giorgiadis, Technical Director of Aerolíneas Argentinas, as well as Santiago Diago, COO of Aeromexico, the panel was held “Operational Challenges and Trends in Latin America and the Caribbean” during the ALTA CCMA & MRO Conference, an event organized by the Latin American and Caribbean Air Transport Association (ALTA).

The executives highlighted that in 2022 the region achieved an outstanding passenger recovery with some markets growing considerably. An example of this is Mexico which, during the pandemic, kept flexible policies in terms of the movement of people and has experienced significant passenger growth.

Diago further explained that Mexico is the exception in the region regarding the fluctuation of exchange rates, which means that Mexicans can travel internationally and that the flow of travelers behaves in a very dynamic way.

Giorgiadis explained that in Argentina the situation is particularly different, since the devaluation of the currency impacts the movement of international passengers. However, “domestic demand in Argentina was exponential during 2022 and this year it has exploded with very high occupancy levels.”

For his part, Pérez explained that “Colombia, at the passenger level, is very strong and that at Avianca we are happy with how the planned business plan after Chapter 11”.

The executives highlighted very positive prospects with sustained growth rates for the next 12 and 18 months. However, they brought to the debate 2 great challenges that impact operations: infrastructure and personnel.

Regarding infrastructure, Diago commented that being Mexico in Category 2 “It puts a brake on the continued growth of traffic between the United States and Mexico, which is the largest international market in the world if the one that exists within the European Union is discounted.”

On the other hand, “having two airports competing in the same segment is difficult. The operators that we have a hub we can’t split it in two. In Mexico in particular, all those involved in this circumstance must sit down to find the best alternative for use in the current instance.

Pérez commented that El Dorado in Bogotá is a fundamental part of the growth of the airline. Before the pandemic the airport had 74 operations per hour, a very complex operation. Now, the capacity has been reduced and it is estimated, according to a recently published IATA study, that the adequate capacity for the current conditions of the airport is 68 operations per hour and that “we are working with the institutions so that technical decisions are made regarding increasing or not the operations”:

Regarding personnel, Giorgiadis commented that Aerolíneas Argentinas made the decision, with the support of the Argentine State, to do not reduce your workforce during the pandemic and that during that time their staff was trained and they have not been impacted by lack of manpower in the rebound in operations. However, he stressed that “we need to expand our workforce and we are seeing the influence of other industries that have changed the way we work.

For example, preferences in terms of attendance, which is a challenge since an airplane cannot be repaired from the home office”. The airline is focusing on universities and technical schools and sponsoring sponsored races to attract talent.

Diago added that young people are looking for alternatives. Either industries that pay better or other regions that, within the same industry, offer various opportunities. Pérez said that retaining and forming talent will be a challenge for many years, but we have the opportunity to recruit talent from outside the industry and bring different skills.

“Competing with compensation from other regions is a great challenge and we are working on it together with other important axes such as the career plan / progress within the company, dialogue with close leaders who care about their teams and the focus on quality of life.

“Talent management is one of the most important challenges of the coming years. We have to continue working on many axes to retain and also to attract talent from other industries, this it will give us more competitiveness and capacity for sustainable growth”, concluded Pérez.