Latin American Aviation Soars to Record Highs, But Faces “Suffocating” Taxes and Regulation, Warns ALTA
Peter Cerda, at the ALTA AGM in Lima, highlights the region's "extraordinary resilience" while calling for "fair, transparent, and collaborative policies" to sustain growth.
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The Latin American and Caribbean aviation industry is more connected than ever, shattering traffic records and demonstrating "extraordinary resilience," but its future potential is being throttled by the world's highest taxes and suffocating over-regulation, according to Peter Cerda, ALTA's CEO, speaking at the AGM & Airline Leaders Forum 2025. In a speech welcoming industry leaders to Lima, Cerda celebrated the region's successes while delivering a stark warning about the significant challenges that lie ahead.
"Despite constant socioeconomic and geopolitical challenges, we can affirm that our region has demonstrated extraordinary resilience," Cerda stated. "In 2024, we reached the highest levels of traffic in our entire history, and in 2025, we continue to show strong momentum. Today, Latin America and the Caribbean are more connected than ever."
Detailing this growth, Cerda noted that the industry has "added, as an industry, 194 new routes since October of last year," with 99 of those routes not having been "flown in almost two decades." He also highlighted a shift in the industry's center of gravity, noting that the region "no longer depends solely on large external markets. Today, countries like Brazil, Colombia, Panama, Chile, and Mexico are motors of global aviation."
Aviation is a "Vital Necessity," Not a Luxury
Cerda forcefully argued that aviation is essential for the region's development, given its massive size. "Aviation is not a luxury in Latin America and the Caribbean; it is a vital necessity," he declared. "Our region covers more than 20 million square kilometers, double the size of the European Union. This vast geography demands air transport that is safe, efficient, and affordable."
Despite this, travel penetration remains low. "America Latina has enormous potential. The average number of trips per capita per year is only 0.67, compared to the 2.5 trips that North Americans take or the Spanish, who fly almost 5 trips a year."
The good news, he noted, is a "rising middle class" that is fueling new demand. "During the last decade, more than one out of every ten passengers in the main markets of Latin America flew for the first time," Cerda said. He attributed this to "the commitment of our industry: lower fares, greater connectivity, increased capacity, and a constant focus on inclusion."
This growth translates directly into economic impact. In 2024, aviation contributed "$240 billion... representing 3.6% of the regional GDP and 8.3 million jobs." By 2033, those figures are expected to swell to "$500 billion and 15 million jobs."
The $3.40 Problem
Despite the booming traffic, Cerda pointed to a critical vulnerability: razor-thin profitability. "Our airlines are profitable, but the margins remain low. Barely $3.40 per passenger flown," he lamented. "That wouldn't even be enough to buy us a Coca-Cola and a sandwich in this hotel today."
"And the question is why?" he asked. "Latin America continues to be the most expensive region in the world in taxes and fees per passenger, affecting both domestic and international flights." He also cited other major hurdles, including that "more than half of our flights operate in congested airports, which increases costs and inefficiencies."
Cerda also took aim at burdensome regulatory frameworks. "We must also address external pressures: the increase in tariffs, unilateral charges, and fragmented regulatory frameworks," he said. "Consumer protection must truly protect the consumer, not load them with costs or limit their access to fly. An over-regulation does not protect, it suffocates."
He expressed frustration with how the industry is often perceived by governments, saying it is "unjustly portrayed by various governments as excessively critical, arrogant, and self-interested."
"Let me be clear," Cerda countered, "The industry is not looking for preferential treatment from our governments. What we are defending are fair, transparent, and collaborative policies that recognize the role of aviation in national development."
He concluded with a call to action, framing aviation as an "investment in the future of our countries."
"If we act with vision, coherence, and urgency, we can receive more than 600 million new passengers in the next two decades," he urged. "We can build a region that is more integrated, more competitive, and more sustainable. That is why we must make the decisions today that will shape the future of aviation in Latin America and the Caribbean."
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