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Looking south

Latin American airports are seeking to accelerate growth with special cargo, as Ian Putzger discovers

Qatar Airways ended 2016 with a strong gesture underscoring its interest in South America, when it announced its decision to acquire a 10% stake in LATAM Airlines, the region's largest carrier (as well as its leading air cargo carrier through freight offshoot LATAM Cargo). The announcement came barely a week after the Middle Eastern airline revealed its plans to enter the region's air cargo market in early February with a launch of twice-weekly Boeing 777 freighter runs to Buenos Aires, São Paulo and Quito, continuing on to Miami.


After two years of retrenchment, cargo airlines are looking to expand in South America again. Air Canada, which launched a freighter service to Bogotá and Quito last summer, subsequently added a second weekly frequency to the sector. AirBridgeCargo Airlines, which has boosted its footprint in the US, has begun to look south.


"We are actively looking at Mexico and South America. It is on our list of projects for 2017," says Robert van de Weg, Senior Vice President of Sales and Marketing of the Russian carrier. In the southern hemisphere Ecuador and Colombia are likely targets, he indicated.


Roberto Schiavone, Senior Vice President Airfreight, Americas Region at Panalpina, noted improvement in the region, which suggests that the downturn of recent years appears to have run its course. "Over the last five, six months we have seen good stabilisation and a shy upwards trend," he says of Brazil, the region's leading economy.


Two years ago Panalpina launched a dedicated 747 freighter service to São Paulo. Originating in Hong Kong, the freighter is routed over the Pacific to Huntsville, which means transit times of 40-45 hours from the Pearl River Delta. The aircraft is full as it heads to Brazil, notes Schiavone.


Boeing is upbeat on South America. Its latest long-term forecasts project air freight in the North America trade lane to grow at 4.3% per annum, with European traffic rising to 3.8% per annum. In 2015 North American traffic was down 4.1%. Statistics for 2015 from the Airports Council International show a decline of 1.3% in air cargo across Latin America and the Caribbean.


Some carriers have pulled out of the market. After the Olympics in Rio last year Korean Air and Singapore Airlines both stopped their services to São Paulo, leaving Air China the only Asian airline with direct flights to South America. Lufthansa suspended its freighter flights to Ecuador and Colombia earlier last year, and Etihad Airways announced that it would end its passenger flights to São Paulo this March.


For airports the contraction has been painful. According to one report, the company that took over the operation of São Paulo's Viracopos International Airport, the city's main cargo gateway, requested a large discount on its contract last October because passenger volume was 45% below what had been projected during the tender process. Further, the airport's cargo throughput in the first nine months of 2016 was down 11%. According to the airport authority, Viracopos handles nearly 40% of Brazil's airborne imports.


To attract more cargo flights, Viracopos has conceived an incentive programme. The scheme, which was unveiled in October, exempts freighter operators from landing fees for two years if they launch a new route or fly at least twice a week. >>

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