Business

Latam suspends all international flights during April and airlines crave for financial aid

Airlines companies from Latin America are suffering with the lack demand because of the coronavirus pandemic

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Airlines companies from Latin America are suffering with the lack of demand because of the pandemic. Latam Airlines suspended all its international flights until the end of April due to the drop in demand caused by the coronavirus outbreak. The company said in a statement that it will only maintain domestic operations in Brazil and Chile according to passenger demand. Special international flights will be assessed according to needs and are subject to approval, as reported by Valor Econômico.

In a video to Brazilian businesspeople group G100, LATAM Airlines Brazil CEO, Jerome Cadier, said that the airline’s demand may recover to what it was before the crisis only in two or three years, according to Panrotas.

Meanwhile, all airlines companies across Latin America are suffering as demand plummets. According to Yahoo, Volaris, the ultra-low-cost airline serving Mexico, the United States and Central America, reported in March 2020 preliminary traffic results, demand measured by RPMs (Revenue Passenger Miles) decreased 10.3% year over year. Latam Airlines decreased 37.9% RPMs in comparison to the same month last year.

Mexico

As low-cost carrier Volaris slashed capacity, also Mexican Interjet’s future is becoming grimmer, since there’s no government bailout on the horizon in Mexico, according to Bloomberg Intelligence analyst George Ferguson. Grupo Aeromexico shares have tumbled by about half this year through Tuesday, said Bloomberg.

The International Air Transport Association (IATA) indicated that it has contacted the Mexican Ministry of Communications and Transportation and sent a letter to Mexican President Andrés Manuel López Obrador, without obtaining any response so far. Peter Cerdá, vice-president at IATA for Latin America said to Expansión that the association is concerned because they don’t see Mexican government taking necessary leadership to support the airline industry.

Bloomberg also reported that IATA said that at the global level, airlines could lose a quarter of a trillion dollars in revenue this year. CAPA Centre for Aviation says that most carriers are going bankrupt by the end of May if they can’t find support.

On the other hand, Flapper, a Brazilian business aviation startup, is adapting to the new scenario where leisure flights are in sharp decline, but demand for aeromedical transport and the repatriation of people has grown.  The smaller number of scheduled international flights – which witnessed a reduction of about 95% in Brazilian airports – also made cargo logistic operators that used these routes to look for  alternatives, including Flapper services.