In Latin America, the long journey of the airlines to meet

En Amérique latine, le long chemin des compagnies aériennes pour se relever

The pandemic of sars coronavirus their wings have been cut: airlines of Latin America require urgent assistance of the governments of the region to assist in the reorganization of which depends on their survival.

The two largest airlines in the region — the chiléno-brazilian LATAM and the colombian Avianca — asked recently to benefit the United States of the bankruptcy act, a sign of the severity of the crisis.

For the international air transport Association (IATA), it will take nearly three years to that the companies found the level of domestic and regional flights in 2019, and four years for routes to the United States and Europe.

“It is a long race. This will not be in the short term, it’s going to require a lot of work”, warns the vice-president of IATA for the Americas, Peter Cerda.

Due to the pandemic, 93% of the 200 000 daily flights were suspended. An estimated loss of $ 18 billion and expected to rise further.

For Mr. Cerda, “airlines will not be able to recover, they will have to stop their activities forever,” he predicted.

After nearly three months of closure of the borders, most of the companies have more cash, and help governments becomes “urgent”, writes the professional.

But such support is subject to debate in a region where the pandemic has worsened the poverty of millions of people.

“We do not ask for a financial bailout, what we ask for, it is support: for relief immediate,” such as fee reductions, or guarantees of loans, “which allow this industry to take,” said Mr Cerda.

On the $ 123 billion of government subsidies that are unlocked in the world, Latin America is only 300 million, according to IATA.

Yet, while the world is currently losing to this situation: “airports, airlines, governments,” who need to think in terms of connectivity of the region, says Fernando Gomez-Suarez, an independent analyst of the mexican.

Special rates

In the case of LATAM, the chilean government has said to investigate the possibility of a bailout, as the company, with 10 000 direct jobs and 200 000 indirect jobs, is regarded as “strategic”. Santiago has started talks with the government of Brazil, as well as with those of Peru and Colombia, where the company has subsidiaries.

In Brazil, the largest market within the region with 90 million passengers per year, private banks, driven by a development bank has granted a loan of $ 1.1 billion for the three largest companies: Gol, Azul and LATAM.

To access the loan, Gol and Azul have agreed to reduce the salaries of their executives. The three companies have also provided special rates and promotions to accompany the recovery.

In Mexico, the most important destination for foreign tourists in the region, discussions are underway with the government to ensure that companies benefit from payroll tax cuts.

Aeromexico, the largest airline in the country, whose rating has been lowered by the agency S&P because of the potential “unsustainability of its debt”, should revive some of the links from the 1st of June.

In Argentina, where the government has decreed a suspension of flights until September, the state-owned Aerolineas Argentinas announced early in may a merger with its subsidiary Austral to save up to $ 100 million.

In all cases, the staff find themselves in the front line. Those who have not been laid off, have suffered wage cuts to keep their jobs.

“Imagine that you lose half or more of your salary and the bills continue to fall,” said José de Jesus Suarez, spokesman for the union of the mexican pilots (ASPA), is increased from six days of flight per week to only one or two per month.

For the analyst Gomez Suarez, the markets left vacant by the disappearance of some airlines could quickly be absorbed by others.

But the most urgent challenge will be to harmonize the new sanitary protocols between countries, which will also lead to higher costs for passengers, in a region where companies low cost have so far struggled to impose itself.

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