IATA says high taxes are biggest obstacle to Latin America’s aviation growth

IATA’s regional vice‑president for the Americas, Peter Cerdá, warned in Rio de Janeiro that taxes account for about 29 % of airline ticket prices in Latin America – far higher than in Africa, Asia‑Pacific or North America. He said the high fiscal burden and complex regulatory environment prevent the sector from competing with long‑distance bus travel and threaten demand growth, which is projected at 3.7 % per year to 2040.

Cerdá cited Brazil’s proposed value‑added tax increase that could raise airfare rates by 26 % and cut demand by up to 30 %, a recent Peruvian levy that lowered seat supply by 10 %, and Argentina’s 15 % tax on tickets. Conversely, countries that reduced air‑transport taxes – Paraguay, Guyana, Barbados, Ecuador and the Colombian city of Cartagena – saw a quick boost in flight demand. The aviation industry in the region provides roughly 3.8 million jobs and generates about $85 billion in annual revenue. Cerdá urged governments to lower taxes, create a public air‑transport system and change the perception that air travel is only for the wealthy.