LAC passenger traffic reaches pre-pandemic levels for the third time

In March 2023, Latin America and Caribbean (LAC) exceeded for the third time passenger carried in 2019. The region had reached this milestone in September and December 2022. Precisely, until the end of last year the region led the global recovery of passenger traffic, but, so far this year and for the third time in a row, Africa takes that place with 101.7% of 2019 passengers, reports the Passenger Traffic Report prepared by the Latin American and Caribbean Air Transport Association (ALTA).

“March showed a slight recovery compared to the two immediately preceding months but economic forecasts for Latin America and Caribbean (LAC) for this year reflect a slowdown that will have a negative impact on air passenger demand in the region. The most recent economic growth estimates of the International Monetary Fund (IMF), released at the end of April 2023, show that the region will grow by 1.6% this year, a figure that represents a deceleration of 0.2 points, vs. to its January forecasts,” highlights José Ricardo Botelho, ALTA’s Executive Director & CEO, who explains that this economic deceleration will result in a lower demand for air transport services.

The IMF –continues Botelho– also estimates that 2023 will close with a 13% inflation rate in LAC. This variable, in addition to affecting the monetary policies of the countries in the region, will negatively impact the demand for travel and tourism services. Furthermore, the region’s currencies, although they have tended to revalue in recent months, show devaluation when compared to 2019. “In general, exchange rates negatively affect airlines because of 75% of their cost structure being dollarized,” Botelho points out.

Fuel prices are down vs. previous months, but they are at higher levels than their pre-pandemic levels. “All these data point to a difficult economic situation in 2023,” warns ALTA’s CEO, who reiterates his call to the region’s governments to work together on State Agendas that will allow facing the economic crisis affecting the region for a sector that is essential for the population.

Positive figures for domestic and international traffic

In terms of domestic passenger traffic, some countries stood out: Colombia exceeded its March 2019 levels by 14%, a very positive number, although lower than in February, when it had reached 127%. Mexico, on the other hand, was 21% above its pre-pandemic levels, so both countries showed a slowdown in their growth compared to February of this year.

This month also brought positive growth for Argentina and Chile. For the third time in a row, Argentina exceeded its 2019 levels and Chile, for the first time, practically reached its pre-pandemic levels. Meanwhile, Brazil is getting closer and closer, reaching 96%.

For international passenger traffic, in March 2023, several countries in the region continue to stand out with very positive growth, Colombia and Mexico grew by 19% and 10%, respectively, vs. their 2019 levels, however, Mexico showed a slight deceleration compared to February.

Meanwhile, the Dominican Republic reached 109% of its 2019 levels, while Brazil, Chile and Argentina were at 79%, 78% and 71%, respectively, in February 2023.

(*) Latin America very unequal in Q1

In general, during the first quarter of 2023 the region showed an unequal recovery when compared to the first quarter of 2019. In this context, the main markets in passenger traffic were: Brazil, Mexico, Colombia, Argentina and Chile, mainly.

In growth rates, these were positive for Mexico, Colombia, Argentina and the Dominican Republic. The remaining countries have not recovered their 2019 levels, with Cuba being the most affected with a 34% reduction over its pre-pandemic levels.