Dear Industry Colleagues,
To finish the first half of the year, we held an Aviation Day for the Caribbean in Barbados at the end of June, supported by the Caribbean Development Bank (CDB) and ALTA. The event was very well received with over 200 senior attendees and 20 Caribbean States represented, including six Ministers of Transport/Tourism from Barbados, Bahamas, Guyana, Saint Lucia, Jamaica and Curacao. One of the main topics of the day was taxation as Caribbean States like St. Lucia and Barbados recently proposed new fees and charges, making operating to, from and within the region even more expensive. We pushed back on these new fees and emphasized that aviation should not be treated as a cash cow for governments and that the long term impact will be negative.
The good news is that the various governments were receptive to listening and working with the industry. As a key action item and outcome of the conference, the participating Ministers of various Caribbean States agreed to hold a high level aviation summit with airlines, airports and other industry executives, and asked IATA to facilitate this first ever Caribbean Aviation Summit to create tangible recommendations to address aviation’s largest challenges across the region. Our plan is to now work with CARICOM (Caribbean Community) and its twenty-six member and associate States to bring the various governments, airline CEOs and key industry players together to agree on specific action items to allow aviation maximize its benefits for the region. You can view key highlights of the CDBs study on Air Transport Competitiveness and Connectivity in the Caribbean below and access all event materials here.
In other news, Andrés Manuel López Obrador won the presidential election in Mexico with over 53% of the vote, and his party also won an outright majority in both houses of Mexico’s congress. Throughout his campaign, López Obrador stated he would stop the construction of the new Mexico City International Airport but in recent weeks toned down his demands, and suggested he will rather re-asses all given contracts. Over the past months IATA has worked closely with all candidates, including López Obrador's team, to ensure we establish a working relationship. We are now able to offer our insights to the new government as López Obrador and his Ministers transition to power on December 1 and advocate how aviation supports the development of Mexico and how crucial the new airport is for our industry.
Further South, as a good example of government de-regulation, the long-awaited U.S. / Brazil Open Skies agreement was ratified and signed in June, allowing airlines to offer more service and bring more choice to passengers between the two markets. It will be interesting to see how the industry reacts and if other countries will follow suit.
Please find the summary of IATA’s key activities across the Americas in June below and please let me know
if you have any questions or would like us to take further action.
With kind regards,
Peter Cerdá, IATA’s Regional Vice President, The Americas
Brazil: Open Consultation for New Round of Airport Concessions
IATA continues to work with the Agencia Nacional de Aviacao Civil (ANAC) to demonstrate the importance of improving eco-nomic regulation of Brazilian airports under concession by ensuring that efficiencies at the airport are passed on to all con-sumers. IATA has been coordinating contributions to the current consultation process together with the Association of Brazilian Airlines (ABEAR), airlines, and other industry stakeholders.
Costa Rica: Potential Rate Increase for Operators
The authorities in Juan Santamaria International Airport (SJO) intend to impose a tariff on the airport’s ground handlers. The proposed tariff consists of 12% of the handlers’ gross revenues and is intended to cover the use of space inside the airport for their operations. This new rate would increase their operational costs, which raises the possibility of transferring this increase to airlines. IATA is working closely with the local BAR and will present a joint letter to the airport authorities once the final document outlining the increase is published.
Ecuador: Health Insurance Requirement for Foreign Visitors to be Repealed
Through an executive decree, authorities in Ecuador enacted a requirement that all foreign visitors that enter the country must show proof of having a valid health insurance. Following close work between the local BAR and IATA and sending a letter to the Minister of Tourism stating that this measure would be detrimental to the country’s effort of promoting aviation and tourism, an article which repeals the requirement was included in the Economic Development Law approved by the Ecuadorian congress. This law is currently in the President’s office awaiting Presidential sanction.
Guatemala: Update on Potential Tax Penalties for International Carriers
As an update of the sanctions applied by Guatemala’s tax authority as a result of the non-recognition of the use of globally accepted cost allocation formulas to calculate the taxable amount corresponding to the operations in Guatemala, IATA held a meeting with the country’s Minister of Finance. The Minister stated that he does not have the authority to stop the tax authority’s execution process. However, he offered to hold a technical meeting with the tax authority and the affected airlines to review this topic in more detail and establish clear criteria before the cases that are pending a resolution from the tax authority are addressed. The Ministry of Finance will then request and review the status of each pending case with the criteria established during the technical meeting. IATA’s taxation experts will also participate to support the airlines and emphasize the importance of globally accepted taxation principles.
Mexico: Energy Reform Update
IATA, ALTA, CANAERO and fuel representatives from member airlines, met twice in June with the Mexican Energy Regulatory Commission (CRE). In these meetings, the industry had access to the proposed Terms and Conditions, including prices for fuel storage facilities at all airports in Mexico currently served by Aeropuertos y Servicios Auxiliares (ASA). As a result, IATA requested an extension of the consultation period, as the assumptions used to calculate the proposed fees are not in line with industry standards and best practices. A follow-up meeting with CRE will take place in Mexico City on July 13. On the product side, an industry delegation will meet with the Undersecretary for Hydrocarbons to discuss the entrance of fuel suppliers into a market where PEMEX is the monopoly supplier.
Peru: Mincetur's Monthly Roundtable to Discuss LIM & CUZ Airport Updates
IATA continues working closely with the Peruvian Ministry of Foreign Trade & Tourism, Mincetur, in creating a consultative space for the industry, prioritizing LIM and CUZ airports. Mincetur has adopted IATA’s recommendation to hold a monthly roundtable to discuss critical aspects of the LIM airport expansion as well as stop-gap measures for both LIM and CUZ. The roundtable is facilitated by Mincetur and composed of the DGAC, CORPAC, LAP, ADP, AETAI, Airlines, and IATA. The strategic agenda covers the following key areas: 1) ATM Efficiency and Airspace Redesign, 2) Stop-Gap or temporary measures, 3) Itinerary facilitation and capacity declaration, 4) Airport Collaborative Decision Making (ACDM), and 5) Security and Facilitation Processes.
Vancouver SLOT Conference & Regional Implications
IATA continues to work with the industry to ensure the fair, neutral and transparent allocation of airport slots at the world’s most congested airports through the application of the Worldwide Slot Guidelines (WSG). In June IATA hosted the 142nd Slot Conference in Vancouver to review slot-related issues and planning for the upcoming Northern Winter Season 28 October 2018 to 30 March 2019. The Colombian and Cuban Slot Coordinators as well as observers from Mexico participated from the region, including Mexico City International Airport (AICM) and the Mexican Civil Aviation Authority (DGAC). At the event, the delegation from Mexico confirmed that the role of the DGAC Independent Slot Coordinator is expected to be filled in the coming months and that the AICM will be attending the 143rd Slot Conference in Madrid from November 13-16.
Americas Security Focus Group Meeting & Launch of Security Forum Platform
At the 2nd meeting of the IATA Security Focus Group, members voted for the top 4 regional security priorities. Airlines agreed to champion each priority and assist in the delivery of the respective actions plans. The highest priority is "Monitoring regional threats, challenges and opportunities". AA, AM, AV, CM, DL and IATA are now working on improving security communication in the region to meet this priority. As part of this initiative, the IATA Security Forum platform has been launched and provides monthly regional updates and key security notifications, becoming the primary medium to engage the industry. In addition, Brazil´s Civil Aviation Authority (ANAC) and the US TSA presented their latest initiatives at the meeting and all parties are now looking for opportunities to work together to meet their responsibilities outlined in ICAO´s Global Aviation Security Plan (GASeP). As part of this collaboration, IATA will present its Security Strategy at ICAO´s "GASeP: Regional Conference on Aviation Security for the Americas and the Caribbean" in Panama late July. The other three security priorities will be highlighted in future Americas Focus editions.
IATA Reminder: FAA ADS-B Out Exemption Deadline Approaching on Aug 1st, 2018
The deadline for airlines to apply for FAA ADS-B OUT Exemption 12555 is August 1, 2018. Airlines operating in the USA National Airspace System (NAS) who have not received this exemption must comply with the entirety of the mandate at midnight on the December 31, 2019.
Americas Focus: Archive