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The aviation in Latin America it grows at a rate above the world average, but bureaucratic obstacles and high tax burden could slow down the development of the region.
From the 82nd IATA Annual General Assembly on Rio de Janeiro, An exhaustive analysis has been presented on the current state and future of aviation in Latin America and the Caribbean. The data reveals a clear duality: a region with projected growth above the world average, but that still faces significant brakes that limit its full development.
Aviation in Latin America can grow even more
Aviation is a fundamental catalyst for the Latin American economy. Currently, the sector contributes with 240.000 million dollars to the regional GDP and sustains 8,3 million jobs, equivalent to 1 decade 35 jobs throughout the region. This impact is broken down into:
- Direct impact of aviation: 60.000 millions of dollars.
- indirect impact: 52.000 millions of dollars.
- Induced impact: 39.000 millions of dollars.
- Catalytic impact of tourism: 85.000 millions of dollars.
What's more, there is a clear opportunity in air cargo, with year-on-year growth of 2,9% in cargo traffic (CTK), driven by exports and e-commerce of regional products such as flowers, blueberries, cherries and salmon.
Projected growth vs.. local realities
Compound Annual Growth Projections (CAGR) for the period 2026-2040 place Latin America and the Caribbean with a 3,7%, surpassing the 2,8% of North America and aligning with projected growth worldwide.
Nevertheless, when looking at regional connectivity (2019 vs. 2025), reality is uneven. While countries like Colombia have shown positive growth in routes (+21%), frequencies (+18,4%) and seats (+41,9%), other markets like Brazil and Mexico have experienced contractions in their offer of routes and frequencies compared to the levels of 2019.
A group of countries that have managed to capitalize on their connectivity stands out notably., showing positive figures in all indicators:
- Colombia: It is one of the most successful cases in the region, recording an increase in 21% on routes, 18,4% in frequencies and a solid 42,5% in the offer of seats.
- Dominican Republic: It shows significant dynamism with a growth of 6,3% on routes, 34,6% in frequencies and an increase in 41,9% in seating capacity.
- Ecuador: The Ecuadorian market also reflects a positive trend, with a growth of 11,1% on routes, 0,9% in frequencies and 13,4% in seats.
- Chile: It presents a notable growth in the supply of seats in the 42,5%, with an increase of 4,6% in frequencies, although it shows a slight reduction in 8,5% in the total number of routes.
Other countries show an interesting dichotomy: although they have seen their total number of routes reduced and, in some cases, of frequencies, have managed to increase their total seating capacity, which suggests a consolidation of the offer on trunk routes with larger aircraft or higher occupancy.
- Mexico: Despite a reduction in 15,8% on routes and 2,3% in frequencies, has achieved growth of 21,5% in the total offer of seats.
- Argentina: It presents a reduction of 6,5% on routes and 2,1% in frequencies, but reports an increase in 6,3% in seating capacity.
- Peru: With a fall of 15,4% on routes and 3,7% in frequencies, still maintains positive growth 3,5% in its seating capacity.
Larger-scale markets face challenges to recover the capillarity of their pre-2019 network:
- Brazil: Shows a contraction in all indicators: -9,9% on routes, -22,6% in frequencies and -6,3% in seats.
- USA: Despite its enormous scale, also reflects a downward trend compared to 2019, with -5,2% on routes, -11,6% in frequencies and -4,2% in seats.
This analysis shows that, while several Latin American countries have managed to significantly expand their connectivity, Mass markets are still in a process of structural reconfiguration of their networks to reach operating levels prior to the global crisis..
The brakes on takeoff: Why is it more expensive to fly??
Despite the potential, The region faces “growth brakes” identified by IATA:
- Latin America has the highest rate of taxes and charges per passenger in the world, representing the 29% of the cost of the average fare in 2023.
- Counterproductive public policy proposals and limitations in infrastructure and capacity.
- Examples such as the new charge for international connection at the Jorge Chávez Airport in Lima, which adds 11,88 dollars per passenger, demonstrate how these decisions can result in route cancellations, reduction of seats and loss of millions in tourist spending.
The call from the summit is clear: Better coordination is required between governments and airlines to establish more predictable regulatory frameworks. Although the number of trips per capita continues to increase—showing that the desire to fly is resilient—, The development of aviation in Latin America depends on avoiding policies that artificially make air transport more expensive for the final consumer..
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