Asociacion Latinoamericana de Transporte Aereo (Latin American Air Transport Association)
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Asociacion Latinoamericana de Transporte Aereo (Latin American Air Transport Association), or ALTA, is a private, non-profit organisation composed by Latin American commercial airlines, whose objective is to combine and coordinate the efforts of its Members “to facilitate the development of air transport in the Latin America region and to ensure better communication and collaboration amongst them for the users, the industry and the mutual benefit”.
The general assembly is the main organ of the association and is formed by its Members, whose will be represented in the meetings by airline Presidents.
1,246 total articles
ALTA president: Mexico political parties need to 'insist' on construction of new Mexico City Airport
73 total articles
International Airlines Group: 2015 target raised thanks to BA & Vueling; Iberia still has work to do
As CAPA predicted, IAG increased its operating profit target for 2015 at its recent capital markets day. This reflects better progress than previously expected at British Airways, the integration of Vueling into the group and additional growth at both BA and Vueling.
The group’s target has been raised from EUR1.6 billion to EUR1.8 billion. British Airways’ own 2015 operating profit target has been raised from GBP1.1 billion to GBP1.3 billion. This would bring BA to an operating margin in the region of its best-ever level of 10%.
The increase in the BA target, translated into EUR, is more than the increase in the group target. The implicit reduction in the Iberia target increases the pressure on its restructuring programme to create a competitive cost base. Nevertheless, the group as a whole now faces the real prospect of generating a return on capital ahead of its cost of capital.
Air Europa has been talking up its ambitions in Latin America. It has firm orders for eight Boeing 787 aircraft, but its president Juan Jose Hidalgo recently said it will eventually have up to 22 of the type by 2020-2022. He plans to deploy them on Latin American routes. These could include Mexico City, Bogota, Cartagena and Quito.
Currently, Iberia is the leader on all three routes to Latin America where it competes with Air Europa and is number one overall on Spain to LatAm. However, Air Europa has been picking up routes dropped by its larger rival and Mr Hidalgo says it plans “to fly all the destinations that Iberia flies to”. The pendulum is swinging towards Air Europa in much of the region outside Central America. Iberia has abandoned the Caribbean altogether.
Air Europa has a unit cost advantage and ambitions to grow. This poses a credible threat to Iberia’s Latin American network. Iberia’s cost restructuring will have to succeed if it is to avoid a further dulling of its brightest network jewel.
Having recently celebrated the significant milestone of competing an initial public offering, Mexican low-cost carrier Volaris remains bullish over the opportunities inherent in the Mexican aviation market as its domestic share continues to grow and its position in the international transborder space remains steady.
Key to Volaris’ belief in the robust opportunities present in Mexico is the growing appetite for air travel among the country’s increasing middle class. In the short term that thesis may prove tough to execute as the Mexican economy has been slowing and domestic passenger growth has not been as rapid during 2013 as recent years when Mexico’s carriers were scurrying to fill the void left by the collapse of Mexicana in late 2010.
As Volaris works to capture more of Mexico’s middle class, its competitors are devising their own strategies to compete in the dynamic Mexican market place. Aeromexico recently launched a new low-fare product scheme, "Contigo" while Interjet is planning a small market push as the first of its 20 93-seat Sukhoi Superjet 100s comes online. All of those dynamics should make for an interesting market place during the next couple of years as those carriers, along with VivaAerobus work to stake out their respective claims among the growing passenger base. Volaris is basing its future on a fleet comprised only of Airbus A320s while some of its competitors are utilising smaller jets to exploit thinner Mexican and transborder routes.
A new air services agreement recently forged between Mexico and Indonesia opens up an opportunity for a codeshare between Aeromexico and Garuda, which in early 2014 will be joining the Mexican flag carrier in the SkyTeam alliance. The expected partnership should result in the first of many codeshares between carriers from Southeast Asia and Latin America.
Southeast Asian and Latin American carriers are starting to seek out opportunities to partner with each other as ties and trade between their regions increase. The current lack of partnerships between Southeast Asian and Latin American carriers give Gulf and European carriers an advantage in carrying passengers between two of the world’s fastest growing aviation markets.
Aeromexico is the only Latin American carrier serving Asia, where it sees opportunities for expansion using its new Boeing 787 fleet. But Aeromexico only serves North Asia and will need to rely on partnerships to serve Southeast Asia.
Freight has become the perennial underachiever in the air transport industry. According to IATA, its share of world airline revenues fell from 12.4% in 2003 to 9.1% in 2012 and will fall to an estimated 8.7% in 2013. While a sharp increase in cargo traffic and yield led the industry back into profit in 2010, freight has been a drag since then. It underperforms the passenger business in traffic growth, yield growth, load factor and daily utilisation.
In early Sep-2013, IATA described the outlook for air freight markets as “cautiously positive” amid signs that a cyclical recovery in demand may be starting. Indeed, this optimism has been echoed in comments from Turkish Cargo and Lufthansa Cargo anticipating better conditions in 4Q2013 and 2014.
That may be so, but major structural reforms are going to be essential in a sector that fails to fill even half of the capacity it supplies into the marketplace.
Latin America provides huge growth opportunities for low-cost carriers given the region’s expanding middle class and miniscule LCC penetration rate outside the two largest domestic markets. The existing small field of six LCCs are best positioned to benefit from the anticipated growth and leverage their first mover advantage. Four of the carriers are eyeing initial public offerings (IPOs), which could give them the cash to accelerate expansion in their home markets and regionally.
Latin America’s LCC sector is now concentrated in only three countries – Brazil, Mexico and Colombia. The other 18 countries that comprise Latin America (excluding the Caribbean) account for about 35% of seat capacity but, remarkably, do not have a single local LCC. These markets are only served by foreign LCCs, resulting in limited and in some cases no LCC services at all. The overall LCC penetration rate in these 18 countries is approximately 2%.
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