ALTA and ALA Bolivia warn of imminent collapse of air connectivity in Bolivia due to unsustainable measures

 

December 11, 2024 – The Latin American and Caribbean Air Transport Association (ALTA) and the Bolivian Airlines Association (ALA Bolivia) warn about the escalating measures imposed by YPFB Aviación, a strategic supplier for air operations in the country. These actions, including the requirement to split payments 50% in Bolivian currency (BOB) and 50% in U.S. dollars (USD), cash payments, and the return of previously made advances, directly threaten the sustainability of air operations in the country.

A Situation that Began with Restrictive Measures

For over a year, airlines in Bolivia have implemented strategies to adapt to the scarcity of foreign currency, while assuming high costs for international remittances, which in some cases exceed 30%. However, the imposition of payments exclusively in dollars, in a context of limited availability of foreign currency in the Bolivian financial system, has plunged the sector into an unprecedented crisis.

Recently, YPFB Aviación introduced additional conditions, such as the return of advances and the demand for cash payments, placing airlines in an unsustainable position. These measures have been rejected by the airlines, and some are already considering suspending their operations in Bolivia, a scenario that would have catastrophic consequences for the country’s connectivity.

Aviation: An Economic and Social Pillar Under Threat

Aviation in Bolivia is crucial not only for the connectivity it provides to a landlocked country but also for its economic impact. In 2023, 70% of international tourists arrived in the country by air, generating revenues equivalent to 5.2% of GDP (USD 2.5 billion) and more than 304,000 jobs. Additionally, air transport is vital for international trade, as nearly 50% of air cargo is carried in passenger aircraft, facilitating high-value exports.

Despite its importance, Bolivia’s international connectivity remains 21% below pre-pandemic levels, with a reduction in active international routes from 23 in 2017 to 19 in 2023. Moreover, airlines operating international routes have dropped from 11 to 10 in the same period and could face further setbacks if these measures persist.

The Impact of Air Disconnection

If this situation is not resolved, Bolivia faces a collapse in its air connectivity, impacting millions of citizens, the national economy, and foreign trade. In 2023, total exports amounted to USD 13.6 billion, of which 24% were transported by air. Despite its low volume, air transport is the second most important mode in terms of value, after land transport.

An Urgent Call for Immediate Solutions

ALTA and ALA Bolivia urge national authorities and strategic suppliers to take immediate action to ensure the continuity of air operations and preserve the country’s connectivity.

In this regard, we demand:

• Establishing sustainable conditions for airlines, allowing payments in Bolivians, the country’s legal tender, and eliminating any cash payment requirements.
• Ensuring priority access to foreign currency for the aviation sector at the official exchange rate, stabilizing operations, and avoiding excessive fees.
• Initiating an immediate dialogue between authorities, suppliers, and airlines to find viable and sustainable solutions.

ALTA and ALA Bolivia reaffirm their commitment to collaborating with authorities and stakeholders in the sector to ensure a sustainable solution that preserves air connectivity and the country’s economic development.