Aviation driving growth in Latin America

March 21, 2012 at 2:51 PM
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RIO DE JANEIRO, March 21 (UPI) -- Growth in aviation and related security business is driving economic growth in Latin America and the Caribbean where it has created more than 4 million jobs and contributed $107 billion to national earnings, a report said.

Air transport expansion led to new business growth across a wide economic spectrum, of which security and the services sector formed a large part.

Data released at the Aviation and Environment Summit in Geneva, Switzerland, indicated the transportation sector emerging as a key driver for development in economies that ranged from low-income and small to dynamic emergent giants such as Brazil and Chile.

The report, "Aviation: Benefits Beyond Borders," was produced by the Air Transport Action Group and Oxford Economics. It outlines an industry that its authors say plays a larger role in Latin America, Caribbean and global economy than many would expect.

"In Latin America and the Caribbean alone aviation directly employs over 465,000 people," ATAG Executive Director Paul Steele said.

"If we include indirect employment at suppliers to the industry, induced employment from spending by aviation industry employees and the jobs in tourism that air transport makes possible, this increases the regional figure to 4.6 million jobs."

"Aviation's economic benefits spread far beyond the monetary aspects," said Steele. "When you take into account the further benefits gained through the speed and reliability of air travel, the businesses that exist because air freight makes them possible and the intrinsic value to the economy of improved connectivity, the economic impact would be several times larger."

ATAG, a global coalition of organizations and companies, aims to bring about environmental and infrastructure improvements through cross-industry cooperation.

Passenger numbers in Latin America and the Caribbean are expected to almost triple from 145.9 million in 2010 to 438.9 million in 2030, ATAG research indicated.

Meanwhile, cargo volumes are projected to rise 6.1 percent a year. The association says aviation supports 56.6 million jobs worldwide and contributes $2.2 trillion of the world's gross domestic product.

About 1,500 commercial airlines using nearly 24,000 aircraft serve 3,800 airports, the report says.

Alex de Gunten, executive director of the Latin American and Caribbean Air Transport Association said the findings were "great news" but warned some factors could still affect the industry in the region.

"While the aviation industry in Latin America continues to reach major milestones and grow at significant rates, there are many variables that can still negatively affect the industry," de Gunten said.

He said government cooperation to keep up with the industry's growth was the key.

"Without their collaboration on issues related to infrastructure, taxation and lack of harmonization of regulations across the region, the progress we have achieved during the last two decades is at risk."

Javier Martinez Botacio, director general of Airports Council International, Latin America and the Caribbean said the report showed "the region is rightly characterized as the 'growth' star of the global aviation sector."

However, he implied that some countries need to invest more.

The high point of aviation growth in Latin America will be reached when Brazil hosts the FIFA World Cup in 2014 and the Olympics in 2016.

"Latin America's aviation sector is growing faster than the global average and that potential for growth has not yet been exhausted," said Steele.

"Brazil, for example, has significant untapped potential. The average U.S. citizen travels by air 1.8 times each year, while the average Brazilian takes 0.3 flights.

"As the Brazilian economy strengthens, with a population of over 190 million, there is great scope for both the aviation industry to grow and for the economic knock-on effects in areas like trade and tourism to also benefit," Steele said.

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