Latin America’s Aviation to Grow 5.8% in 2025, IATA Reports

Latin America's commercial aviation sector is projected to grow by 5.8% in 2025, measured in revenue passenger kilometers (RPKs), according to Peter Cerdá, Regional Vice President, lInternational Air Transport Association (IATA). Speaking at the “Wings of Change Americas” event in Bogota, Colombia, Cerdá emphasized that growth is constrained by high taxation, inadequate infrastructure, and political instability across the region.

“The projected global profit for the airline industry in 2025 is approximately US$36 billion. However, this translates to only US$7.20 per passenger per segment globally, and in Latin America, that figure drops to US$3.40,” said Cerdá. “That’s barely enough to buy a coffee at Juan Valdez in Bogota’s El Dorado International Airport.”

The region's aviation sector is crucial, connecting over 670 million people across 33 countries. In 2024, nearly 481 million passengers traveled in Latin America and the Caribbean, marking a 7.8% increase over the previous year, according to Aviación News.

Cerdá highlighted thin profit margins as evidence of the industry's structural weaknesses, citing external pressures such as excessive taxation, regulatory burdens, and outdated airport infrastructure. He identified high taxes and fees as the most significant challenge, especially in the Caribbean, where they can comprise up to 40% of a ticket's total cost.

In Brazil, a proposed 26.5% VAT on airline tickets could substantially increase fares. “This tax would raise domestic ticket prices from US$130 to US$160 and international fares from an average of US$740 to US$935,” Cerdá warned, calling the measure “devastating” for the region.

He also noted that consumer protection laws in some countries fail to align with operational realities. Regarding infrastructure, he pointed out that while some major airports—such as those in Mexico City, Buenos Aires, Bogota, Lima, Panama City, Santiago, and São Paulo—have recently undergone upgrades or expansions, many are already operating near capacity.

“The region needs long-term planning, not just for major hubs but also for secondary cities,” Cerdá stressed.

Despite these challenges, Cerdá expressed optimism about the region’s growth potential. IATA forecasts a sustained annual growth rate of 3.2% through 2044, translating to an additional 218 million passengers over the next two decades, driven by a growing middle class, increased tourism, and greater regional integration.