BOGOTA (Reuters) – Latin American countries are increasingly turning to hiking taxes and tariffs aimed at the aviation sector, even as it struggles to recover amid the coronavirus pandemic, which will see it post losses in the coming years, the industry’s main trade body said on Monday.
Argentina has increased taxes on ticket sales, while Costa Rica plans to hike security tariffs for San Jose International Airport by more than 70%, the International Air Transport Association (IATA) said.
Other hikes are due to come into effect in both El Salvador and the Dominican Republic, IATA director general Willie Walsh said.
While the region is seeing recovery in air traffic, the aviation industry’s “so-called partners” are engaging in a growing trend to increase taxes, Walsh said, referring to authorities throughout Latin America.
“These are unacceptable in a time of crisis, and we cannot tolerate others following in their footsteps,” Walsh said during the annual conference of the Latin American and Caribbean Air Transport Association (ALTA) in Bogota.
Latin American airlines are forecast to see accumulated losses of $5.6 billion this year before falling to losses of $3.7 billion in 2022, Walsh added.
“This crisis goes beyond anything we have ever experienced before,” Walsh said. “The good news, however, is that I think the worst is behind us and we can see a path toward normality.”
According to IATA, domestic markets are expected to reach almost 75% of pre-pandemic levels by the end of this year, although restrictions will keep international travel at 22% of pre-crisis levels due to ongoing measures to curb the spread of the disease.
Standardized rules for international travelers amid the coronavirus pandemic are considered key by industry leaders in order to prevent the aviation sector’s recovery from stalling.
“The overall mood of the industry, I think, is one of cautious optimism,” Walsh said.
(Reporting by Nelson Bocanegra; Writing by Oliver Griffin; Editing by Mark Porter)