LATAM CEO: Latin American governments need to reduce taxes on airlines

Latin American airlines’ growth will be stymied unless the region’s governments ease the tax burden on airlines and passengers, LATAM Airlines Group CEO Enrique Cueto said. Cueto said the region’s airlines have made great strides in efficiency, safety and offering low fares—leading to a doubling of traffic from about 100m to 200m annual passengers in a decade’s time—but cannot make the next leap in growth without a change in government attitudes about aviation. Latin American governments “think passengers are wealthy,” Cueto said. “But now passengers [in Latin America] are laymen. Many of them are flying for the first time … We don’t want governments to give us subsidies, to give us anything. But more than 50% of the price of an airline ticket in some Latin American countries is made up of government charges … Sometimes the taxes are almost the same as the air fare rate. If that’s the case, we’re not going to get anywhere [in terms of growth]. We have to be intelligent.” Cueto added, “If we want to double the industry again [in terms of passenger traffic], we have to think of this as a public service industry. But the government thinks that if someone travels by plane, they have money and should be charged taxes.” Despite recent economic difficulties in Latin America, the region’s airlines have become modern, efficient companies offering high customer-service levels, Cueto said. He noted that Latin American airlines, which 10-15 years ago were beset by safety issues, are now “among the first in safety in the world,” adding, “For three consecutive years, we have recorded zero fatalities and this is historic. This is a complete change.”<br/>