KBRA Releases Research – Latin American Aviation Market Poised for Strong Growth

NEW YORK--(BUSINESS WIRE)--KBRA releases a report assessing the current state of the Latin American aviation market.

The pandemic’s outbreak in 2020 significantly impacted Latin America’s aviation industry, as air travel demand slumped and airlines were forced to cut capacity and park their aircraft in storage. This resulted in substantial declines in revenue, elevated liquidity constraints, and reduced access to credit for most airlines in the region, prompting bankruptcies among the region’s three largest carriers.

However, since the easing of travel restrictions during 2H 2021, demand for domestic and leisure travel, supplemented by the spike in regional cargo operations, has driven a healthy recovery for the Latin American aviation market. Despite the slow-growing economies in the region and the pandemic’s lingering economic impacts, airlines in Latin America are much healthier as they modernize their fleets, expand capacity, and build stronger alliances—including through equity injections from major international airlines.

More than 616 million people live in Latin America and the Caribbean, and the varied topography is challenging for road and rail travel. The lack of transportation options has created strong opportunities for airlines to transport people and goods around the region and the world more efficiently. The Latin American full-service airlines have historically been high cost, with domestic-focused networks and limited international routes. This is rapidly changing, as Latin America has seen the fastest growth in the industry (excluding China and India) over the past 10 years, supported by a burgeoning low-cost carrier (LCC) sector that serves the region’s growing population while linking with worldwide alliance groups.

Click here to view the report.

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About KBRA

KBRA is a full-service credit rating agency registered in the U.S., the EU and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.