Airlines Warn of Imminent Collapse in Bolivia’s Air Connectivity Due to New Restrictions
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The Latin American and Caribbean Air Transport Association (ALTA) and the Bolivian Airlines Association (ALA Bolivia) have issued a warning about the imminent collapse of air connectivity in Bolivia due to new economic measures imposed by YPFB Aviación, a strategic supplier for the sector.
Among the most critical actions are the requirement for payments to be split 50% in bolivianos (BOB) and 50% in US dollars (USD), demands for cash payments, and the return of previously made advances. These conditions have been described by the associations as a direct blow to the operational sustainability of airlines.
For more than a year, airlines have implemented strategies to cope with foreign currency shortages and high international remittance costs, which in some cases exceed 30%. However, the recent requirement for payments exclusively in US dollars amid limited foreign currency availability in the Bolivian financial system has worsened the situation, forcing some companies to consider canceling operations in the country.
YPFB Aviación has added new restrictions, such as requiring the return of advances and cash-only payments, putting airlines in an unsustainable position. If these measures persist, Bolivia could face a total collapse of its air connectivity, with severe consequences for the economy, tourism, and international trade.
Economic and social impact
Aviation is a crucial pillar for Bolivia, a landlocked country, enabling both national and international connectivity. In 2023, 70% of international tourists arrived in the country by air, generating revenue equivalent to 5.2% of GDP (USD 2.5 billion) and over 304,000 jobs. Additionally, nearly 24% of the total value of exports is transported by air, highlighting the sector’s importance to foreign trade.
However, Bolivia’s air connectivity is already in decline. Active international routes dropped from 23 in 2017 to 19 in 2023, and the number of airlines operating internationally decreased from 11 to 10 during the same period. Current restrictions could further exacerbate this situation.
Given this outlook, ALTA and ALA Bolivia have called on national authorities and YPFB Aviación to implement immediate measures to ensure the continuity of air operations. Proposed solutions include:
- Allowing payments in bolivianos, eliminating the cash payment requirement.
- Ensuring prioritized access to foreign currency for the sector at official rates.
- Initiating a dialogue among authorities, suppliers, and airlines to find sustainable solutions.
Both associations have reiterated their willingness to work with authorities to preserve air connectivity, which is essential for the country’s economic and social development.
Consequences of inaction
If the current measures are not reversed, Bolivia risks isolating itself from the international market, affecting millions of citizens, reducing revenue from tourism and trade, and complicating the export of high-value goods that rely on air transport.
ALTA and ALA Bolivia warn that time to act is limited and that immediate solutions are needed to prevent the collapse of air connectivity and its devastating economic repercussions.
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