Foreign airlines’ growing appetite to serve Canada is squeezing industry profitability as supply outstrips demand, says the sales chief of Lufthansa. “Overcapacity is playing a huge role when it comes to the market environment here in Canada,” Jens Bischof, executive VP of sales and CCO at Lufthansa, said Tuesday. “We’ll all take a hit from this.” Several airlines are adding significant capacity in the Canadian market, he said. That includes giants Air France-KLM as well as smaller players like Royal Air Maroc, Iceland’s Wow Air and Turkish Airlines, which is expanding into Montreal with bigger planes. Air Canada has also been boosting flights around the world, while WestJet Airlines is making a big push into London. <br/>
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Passenger traffic in Latin America is expected to grow between 5%-10% per year over the next 10 years, but this growth could be hampered by lack of govt investment in infrastructure, air traffic control systems and airports, industry leaders said. “Aviation is crucial to this region and to connect Latin America to the world economy,” Copa Airlines CE Pedro Heilbron said. In Panama alone, aviation contributes 12.7% to the country’s GDP. Overcoming these challenges has not been made easier by govts, Heilbron said. “Govts are not investing in airports, navigation or infrastructure throughout Latin America,” he said. Second, taxes and fees—which in Brazil, for example, are among the highest in the world are not reinvested back into the industry, but are funnelled into govts’ general funds, Heilbron added. <br/>
Brazil’s lower house of Congress approved a bill that removes restrictions on foreign ownership of the country’s airlines. The Chamber of Deputies voted 199 to 71 Tuesday to allow foreigners to own up to a 100% stake in domestic carriers, up from the current 20%. Lawmakers are still voting on amendments, though they aren’t expected to change the main thrust of the bill. The Senate still has to hold a vote as well. Easing foreign ownership in the aviation industry is the latest example of how acting president Michel Temer is moving to roll back 13 years of heavy intervention in the economy under the Workers’ Party of president Dilma Rousseff, who was suspended last month to face an impeachment trial. The original proposal called for the limit of foreign ownership to rise to 49%. <br/>
While foreign airlines can’t directly own more than 49% in Indian airlines, despite Monday’s liberalised Foreign Direct Investment policy, their group companies or investors can fully own airlines in India with govt approval. So while the likes of AirAsia and SIA will continue to have a cap of 49% on their stakes in Indian arms, The govt is looking to dilute the rule which makes it mandatory for an Indian carrier to be controlled and owned by an Indian or an Indian entity. This will increase competition for Indian airlines, as deep-pocketed airlines from the Gulf will be able to set up shops in India through their group companies. “A foreign airline, through its group companies, will be able to own a carrier in India,” said a senior civil aviation ministry official. <br/>
All Thai-registered airlines have avoided being put on the list of airlines with sub-standard safety practices in the latest audit by EASA, Transport minister Arkhom Termpittayapaisith said Tuesday. EASA, which announced its inspection results last Thursday, found 214 airlines from 19 countries failed to meet safety standards but "no Thai airlines were listed", Arkhom said. The minister attributed the success to a closer working relationship between EASA and the Civil Aviation Authority of Thailand (CAAT). The CAAT was founded to deal directly with inadequate aviation standards, which resulted in Thailand being "red-flagged" by the ICAO last June. Thailand will continue to work with EASA by bringing in agency experts to assess key issues of aviation safety, Arkhom added. <br/>