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IATA in the Americas

 

IATA's regional office for the Americas, based in Miami, along with its 10 country offices support the organization’s mission to represent, lead and serve the airline industry. We seek to improve the understanding of the aviation industry and increase awareness of the benefits the industry brings to regional and local economies.

We champion the global and regional interests of our members, challenging unreasonable rules and charges, holding regulators and governments accountable.

IATA promotes the value aviation brings by increasing connectivity, improving infrastructure, helping airlines in the region become more competitive by advocating for a smarter regulatory environment and improving the passenger experience through the use of technology.

The regional office maintains close relations with governments, their agencies, the International Civil Aviation Organization (ICAO), the Federal Aviation Administration (FAA), Latin American Civil Aviation Commission (LACAC) , Latin American and Caribbean Air Transport Association (ALTA), Airlines for America (A4A), airports, air navigation service providers and regional airline associations.

IATA 5 year strategic plan for the Americas

 The IATA Americas team has developed a five year strategic plan (pdf) with input from key stakeholders across the region to tackle the largest opportunities and threats, creating common objectives and initiatives to focus on between 2016 and 2021.

​The Region at a glance

  • 840,000 jobs generated by the airlines industry in Latin America and the Caribbean
  • 4.2M people employed by industries supported by Aviation
  • 268M passengers transported in 2014
  • $138 billion aviation contribution to the region's GDP
  • 5.4% annual growth of Revenue Passenger Kilometers (RPKs) forecast over the next 20 years

Source: ATAG

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2016 Economic Outlook for the Americas

  • Regional outlook is mixed.
  • Commodity price and exchange rate shocks hit the region hard in 2015.
  • Mexico and Colombia forecast to fare well in 2016; Mexico is benefiting from strong US economy.
  • Brazil is in recession and the next couple of years will be challenging.
  • Argentina’s troubles include high inflation and a worsening fiscal situation. Likely to get worse before it gets better.​​
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Americas Focus, Q1 2016

The year is off to a very fast start as we are fighting many fires across the Americas region. While we can expect a second year of “normal” profits for the industry globally, this ‘normality’ is not yet widespread or secure across regions. The outlook for the Americas is very mixed as commodity price and exchange rate shocks hit the region hard in  2015. 

While the U.S., Mexico and Colombia forecast to do well in 2016, other key economies are much less optimistic. Brazil is in a deep recession and the next few years will be challenging. And while we have been able to establish an open dialogue with the new Argentine government, the country’s troubles include high inflation and a worsening fiscal situation. The country that continues to worry us the most is Venezuela where there is simply no hope to improve in the short term regarding the economic and social instability the country is facing. But we also look to new opportunities in 2016, specifically with the current  developments of establishing commercial service to Cuba for U.S. carriers and IATA’s plan to establish a BSP in Cuba by the end of the year. 

All of these challenges and opportunities have led us to outline a 5 year strategic plan for the Americas that is highlighted below, creating common objectives for all of us to focus on and work towards. As always, our team is here to support you and I hope you enjoy the latest updates on IATA’s most recent initiatives in the region.

Saludos cordiales,

Peter Cerdá, IATA’s Regional Vice President, The Americas

5 Year Strategic Plan for the Americas

IATA’s 5 year strategic plan is divided into the following categories. Safety: Reduce fatalities by 50% by 2020 (based on 2010 data). Security & Facilitation: Ensure implementation of efficient and cost effective security and facilitation processes that are globally coordinated and meet throughput performance targets. Infrastructure: Ensure the airport infrastructure supports the projected 5% passenger growth by 2020. Drive the development of seamless regional operations to reduce fuel consumption and CO2 emissions by 1% (annually) by 2020. Regulatory Environment: Place aviation on the government agenda and raise awareness as to the importance of a consultative, transparent process that results in a more harmonized regulatory framework. Financially Viable Markets: Ensure the airline industry can operate under an environment that allows for a sound return on investments. The detailed plan can be access here. 
Brazil's DECEA Calls for Transparent Consultation
 
Since 2015, IATA has been working with DECEA, Brazil’s air navigation service provider, on a longer term strategy to help it align its processes with ICAO's principles. As a result, DECEA has called for an open consultation with the industry to review its cost/investment structure and has formed a working group (SAC, COMAER, IATA, and ABEAR) to participate in this process. IATA is leading the process and is currently discussing scope, timelines and data requirements with DECEA. IATA is expected to work throughout the year on this unprecedented opportunity. 

Argentina: Meeting with President Macri & Latest Market Developments

In order to establish an open communication channel with the new government and emphasize the benefits aviation generates for Argentina, IATA’s Tony Tyler will meet President Macri in March. Strengthening relationships with the government is needed to move forward a variety of industry projects. In February, ORSNA presented IATA & JURCA with their airport infrastructure plan for 2016-2019. While ORSNA is generally willing to address the main problems, the plan lacks detailed technical knowledge and has no visible intention to consult and involve air operators. The plan further suggests that most of the investment would go to terminals and only 10% to runway/apron works. There is no integral land/air plan and it does not support anticipated growth at AEP. IATA has expressed its disagreements with the plan and will work with various stakeholders to present alternatives.
 

FAA Reauthorization Bill Intrdocuded in the U.S. Senate​

In March, legislation was introduced in the U.S. Senate to reauthorize the funding and programs of the Federal Aviation Administration (FAA). This is the companion to the bill that the House of Representatives introduced. Both measures include provisions providing for greater integration of unmanned aerial systems into the national airspace system, streamlining the FAA aircraft certification process, and enhancing safety and consumer protection. The most notable differences between the two bills are a lack of air traffic control (ATC) modernization language, a shorter authorization, and a much heavier focus on air service and consumer protection in the Senate bill. The House bill would separate air traffic control (ATC) service from the FAA and create a new independent, not-for-profit corporation to provide ATC service, governed by a board of industry stakeholders and government officials. The FAA would retain its role as safety regulator. The Senate bill does not contain a similar provision. In addition, the House bill authorizes the FAA through 30 September 2022, while the Senate bill authorization expires on 30 September 2017. IATA will monitor further developments closely and advocate for ATC modernization. 

Mexico: COFECE's Preliminary Recommendation 

In February, the Mexican antitrust regulator (COFECE) issued its preliminary opinion on the matter of slot allocation and use at Mexico City International Airport (MEX) and finds that there are anti-competitive impacts and loss of efficiency in operation under the current system of slot allocation and monitoring. These include excessive market concentration, low availability of slots, higher prices, low innovation in routes and barriers to new entrants. The opinion therefore proposes a number of measures to eliminate or reduce existing problems and to increase efficiency in the market. COFECE recommends that the airport (i)   increase transparency, monitoring, and control of slot allocation procedures; (ii) implement more consistent monitoring of slot use with a corresponding impact on future seasons’ allocations; (iii) create a reserve fund of slots obtained through application of the new procedures; and (iv) distribute the slots in the reserve fund with an eye towards new entry and the economic value of the slots. Interested parties are now provided 45 business days (until 12 May 2016) to provide comments to COFECE after their review of the preliminary opinion. Please find the extract of the preliminary report published in the Official Gazette of Mexico here. 

Lima Runway Expansion Further Delayed

LIM Airport is expected to handle more than 17M passengers in 2015 in a terminal designed for 10M, already surpassing its initial design capacity. LIM airport expansion project (Phase III) of USD$ 900M includes a second runway and a new terminal, but   continues to be delayed as the Peruvian State is required to hand over the required  land. The last missed deadline was Dec 31, 2015 and while the government has not offered any information, the concessionaire (LAP) has gone public, estimating the new delay to be at least 2 more years. Negotiation for a new (7th) addendum to the concession contract is said to be under negotiation by the parties. 

Venezuela Crisis: Anti-Trust Discussion Immunity​

IATA challenged the payment for fees in USD and sent a letter to the Ministry of Transport,  Finance, Energy and Food asking for these charges to be paid in Bolivars (VEF), emphasizing the need to follow ICAO principles. The official Gazette stated that the aviation sector was moved to the SIMADI rate of exchange (approx. VEF200 per USD1) while total blocked amounts remain at $USD3.8 billion with no new payments since June 2015. To address the worsening situation, IATA has consulted with the U.S. Department of Justice (DOJ) and Department of Transport (DOT) regarding the strenuous conditions of operating to Venezuela and is preparing to file a formal request with the DOT for “discussion authority”, making it lawful for affected Members to get together and discuss both political and economic means to address the situation in Venezuela. In addition to ensuring that there will be no legal risk in merely discussing joint action, the request would have a symbolic impact demonstrating the airlines’ seriousness. 

New Air Transport Contract Regulation in Paraguay​

IATA was invited by DINAC, Paraguay’s DGCA, to send input regarding the ‘New Air Transport Contract‘ regulation project “decree 4333” which increased landing charges by 20% and navigation charges by 14%, effective February 2, 2016. IATA compiled comments received from the industry and shared findings with DINAC for their consideration. IATA also sent letters to DINAC and the Chief of Cabinet requesting to revert the increases established by Decree 4333/2015. 

Reinforcement of Slot Allocation Process in Cuban Level 3 & 2 Airports​

IATA visited Cuba to discuss a wide range of topics, including smarter regulation, BSP, infrastructure and airport development support and worldwide airport slots. During the visit IATA offered to support ECASA (the current coordinator) and CACSA (Civil Aviation) to review their current manual slot allocation process and work with them to improve it with the aim of aligning it fully with the WSG. Taking into account the current increasing demand to the Cuban airports and the expected future growth of air traffic, ECASA has also acquired a slot allocation system to automate their slot coordination process in line with industry best practice. IATA’s support is increasingly important given the announcement on February 16, 2016, that the United States and Cuba have signed a Memorandum of Understanding (MOU) that will allow for the resumption of scheduled air services between the United States and Cuba. 

NDC Developments in The Americas​

NDC (New Distribution Capability)​ is a travel industry-supported program launched by IATA for the development and market adoption of a new, XML-based data transmission standard allowing for product differentiation and time-to-market, access to full and rich air content and a transparent shopping experience. In the Americas, the IATA team has actively engaged 20 member airlines in 2015 via dedicated sessions and worked with the entire industry chain, resulting in full collaboration and understanding of the NDC Standard. In addition, three regional members, Gol, Air Canada and American Airlines, are participating in NDC pilots.​

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