Latam: CEO of the airline talks about the planes they have in Colombia – Business – Economy

With a 34% share in the air market, the CEO of Latam, roberto alvotalk about the situation of the airline and confidence in the countrydespite the pandemic and the political and economic situation.

You are passing through Colombia, how are you seeing things?

I really like coming and seeing how we have been developing Latam in Colombia over the years. It is an interesting, important moment for aviation in Colombia. We come from the biggest crisis in history in the airline industry due to the pandemic that affected the entire world: airlines, tourism, even people who were locked up for a long time. Today we are seeing an interesting recovery in the market worldwide, people are flying again, trying to enjoy a little more.

And to the country? With a lot of turbulence?

Colombia is the second largest market in South America after Brazil and therefore it is an important market for Latam or for any operator. I see a market that has recovery potential, I think tourism has huge growth potential and the important question is how do we take advantage of the potential of a country that fundamentally needs air transport?

(Keep reading: These are the airlines that operate in Colombia).

In your opinion, at what degree of recovery is the sector today?

In Colombia, the number of passengers is slightly higher than the pre-pandemic and it was one of the countries that recovered the fastest, which is interesting. Today it is in a more or less stable situation. Obviously, two companies have stopped operating with a certain pause in this growth, but Latam came out to respond quickly, we made the decision in 15 days to invest 200 million dollars in 5 aircraft that are already operating, there are 200,000 additional seats per month for allow Colombians to continue moving within Colombia and out. And I honestly think thatProspects for the remainder of the year are generally positiveI see a relatively stable economic situation in Colombia and we do have variables that are complex for the industry and that have to be looked at carefully: the price of oil, the currency, the obvious inflation, but I have a moderately optimistic view of the industry.

Is there still an outstanding debt with tourism, especially with San Andrés?

Tourism is a State policy and that requires not only air infrastructure, requires terrestrial infrastructure, promotion of destinations, not only within Colombia but abroad. The country has the potential, it is a matter of looking at the ecosystem, the geography, not only the beaches and the Orinoquía, the jungle, the potential is gigantic, the question is: how is that potential uncovered? And there the State has a role to play in generating incentives that allow this to develop. A good example is the VAT on tickets, which also affects the tourism sector, the return to 19 percent generates a significant brake on the development of tourism. San Andrés is important, we are the airline that operates the most destinations to San Andrés and we have always had a presence. Part of the five planes that we brought were dedicated to trying to compensate for the lack of supply that there was in San Andrés due to the departure of the operators.

(Also read: The ‘error’ found by the Attorney General’s Office in the integration between Avianca and Viva Air).

How much does this latest tax reform follow you?

I understand the need for governments to try to increase their income and dedicate it to plans or programs with a positive social impact, so I think we must start by recognizing that here at the end of the day we need to find a balance between what the private sector needs, what the public sector needs. The question is: what are the policies that generate that reasonable cost benefit? The airline industry generates between three and six indirect jobs for each direct job: the person who attends the hotel, the taxi driver, the guy at the airport, the people who work in restaurants. So a policy like going back to 19 percent VAT, from my point of view, is not the best way to try to boost a sector that can be critical for Colombia.

How are you seeing the integration process between Avianca and Viva?

The first question one has to ask is: why did two airlines stop operating in Colombia and not in any other country in the region? It is true that there are macroeconomic factors such as devaluation, the price of oil, which have affected, but they are factors common to other countries, the price of oil also affects us all. There are two important factors why this happened: first, the tax burden in Colombia regarding tickets is very large. The second reason is the need for access to the infrastructure, here the El Dorado airport is central to Colombia, as long as there is no more open, more equitable access, it will be difficult for the industry to develop.

What does that mean?

Bogota is a busy airport. Today it is very difficult to increase the capacity of Bogotá, although the infrastructure supports more flights, changes must be made that I believe the Government is clear about, which will allow El Dorado to grow over time, but for the moment It is congested and in order to generate a healthier competitive environment it is important that the availability of take-off and landing rights slots that exist in El Dorado be distributed in a way that allows airlines to develop and grow. Latam has made the firm decision to invest in Colombia, we brought five planes, which are 200 million dollars, and we are going to bring more, but if we want to develop a true alternative for Colombians, to travel both inside and outside of Colombia and do it so that free competition is clean and healthy, it is important to generate that access.

(In addition: Latam Airlines Colombia opens a direct route Bogotá – Riohacha).

And that doesn’t happen today?

Today Aerocivil, which from my point of view has done a good job and has resisted significant pressure to try to issue its opinions more quickly than necessary, has focused on trying to defend the parameters of free competition for the industry. aerial.

But what exactly are they asking for?

We are not opposed to the integration of Avianca and Vivabut this is the most complex transaction that the industry in Colombia has had in many years and that requires a very detailed study of the effects of that transaction, if it is approved and if that transaction that has already been approved, let’s say with conditions, involves conditions that do not allow other market players to develop, it will be a bad decision for Colombia.

How would it affect you?

basically. in that it would not allow us to generate our business plans and if we want to grow in Colombia and be an alternative, it would be impeded, it would be weakened, it would be much more complex for us to develop ourselves in the national and international market.

(You can read: They reveal the challenges that El Dorado Airport must face).

Have they exposed that to the Aerocivil?

Aerocivil understands well. I think there is good expertise and they understand well how the market works in Colombia and the importance of a reasonable and equitable distribution, I believe that the Aerocivil resolution of March, last year, which approved the integration between Avianca and Viva, but which generated conditions, was a resolution that from our point of view had aspects to improve of a technical nature, but deep down we thought it was a decision that was quite appropriate to the context of the decision that Aerocivil had to make. The integration of Avianca-Viva, without conditions that allow drivers and other market players to develop their business plans, affects us, affects other market laws and affects the airline industry in Colombia.

How do you analyze the political situation in the country?

The country is advancing in the health reform and the political effects that this has generated, and obviously I believe that this generates some uncertainty and we will see how the Government develops it in the short term. In the medium term we are optimistic with Colombia, we are not seeing or feeling that the macroeconomy in particular is affected by these political effects, I think that is good.

ERNESTO CORTES F.
GENERAL EDITOR EL TIEMPO

More news

In the midst of the economic crisis: this is the presidential plane that Fernández wants

Francia Márquez: how much are your air travel worth? This revealed Cabal

Air France incorporates a new aircraft for the Bogota-Paris route