Routes Americas Report: What Airlines Were Saying

Aircraft delivery delays, high taxes on flight tickets–especially in Latin America and the Caribbean—and rising costs for airlines were key discussion points at the 2025 Routes Americas conference in Nassau, Bahamas.

Airline executives spoke repeatedly of the implications of delayed aircraft and engine deliveries, which force adjustments to network planning. Carriers are increasingly developing schedules under the assumption aircraft will not be delivered on time. Air Canada, for example, is hopeful of receiving the first of 30 Airbus A321XLRs it has on order in the 2025 fourth quarter but is not counting on it.

Air Canada VP network planning and scheduling Alexandre Lefevre said his “confidence level is limited” regarding aircraft delivery dates. “We have been waiting for the XLR for quite a long time and we’re still waiting,” he said. “So, our planning process includes more buffer [than in the past]. If the manufacturer tells us the aircraft will be here in October … I usually plan for the following March.”

Air Canada was originally supposed to receive its first A321XLR in the 2024 first quarter.

Lefevre noted delivery delays are hardly exclusive to Airbus. “It’s across the whole industry,” he said. “It’s not only the manufacturers, it’s the suppliers, it’s the engine manufacturers. Everybody’s struggling now.”

JetSMART, the Indigo Partners-backed LCC based in Chile with subsidiaries in Argentina, Colombia and Peru, is working closely with Airbus regarding the delivery schedule for 21 A321neos it is slated to receive, according to CCO Victor Mejia.

“We have to be close to [engine supplier] Pratt & Whitney and Airbus because of the Pratt & Whitney situation, but it’s not a dramatic situation,” he explained. “It won’t affect our growth plan, but things change from one year to another.”

Meanwhile, British Airways (BA) is continuing to contend with several of its Boeing 787s remaining grounded because of ongoing issues with Rolls-Royce Trent 1000 engines. Neil Chernoff, BA’s chief planning and strategy officer, said on the sidelines of the conference that uncertainty around engine availability had forced the airline to take a more conservative approach to its scheduling.

“We’re working with Rolls-Royce, and they understand the issue, but it’s hard to get certainty,” he said. “We’re developing plans for the winter [2025-26] season both with and without those aircraft.”

Despite the uncertainties, air traffic in North America and Latin America is poised for steady growth in 2025, with increasing numbers of passengers flocking to airports in the post-pandemic years, according to Airports Council International (ACI).

In a joint presentation, representatives of ACI-North America (ACI-NA) and ACI-Latin America-Caribbean (ACI-LAC) painted a positive picture of air transport in the Americas, noting that post-pandemic “pent-up demand” remains apparent.

“Fundamentally, it’s looking pretty good for the US and Canada,” ACI-NA EVP Matt Cornelius said. He noted the number of flights in the US was down from before the pandemic, but passengers had returned to above 2019 levels as airlines upgauge aircraft.

The 8.11 million airline flights operated in the US in the first 10 months of 2024 was up 4.7% over the same period in 2023, but down 5.1% from 8.55 million flights in the 2019 January-October period. Even so, capacity as measured in available seat miles (ASM) was up 3.7% in the first 10 months of 2024 compared to the same period in 2019.

“Those are very good numbers,” Cornelius said of 2024 traffic growth in the US. “You can see some of the trends that are happening in US aviation. Fewer flights versus 2019—still down 5% in terms of the number of flights—but more passengers.”

He added: “The other piece is 9% growth in international traffic—that’s huge. [International] continues to be a focus of growth for a lot of airlines.”

Latin American and Caribbean airports collectively handled 746 million passengers in 2024, up 4% year-over-year, according to Francisco Medela, ACI-LAC’s industry affairs director. He said the figure was expected to grow to 776 million annual passengers in 2025, which would be an increase of 4.1% over 2024.

“Latin America has shown a lot of resilience,” Medela said, noting the region continues to have tremendous upside growth potential as more people switch from buses to air transport. ACI-LAC projects passenger traffic in Latin America and the Caribbean will more than double from 2024 levels to 1.6 billion passengers per year by 2050.

Medela called for governments in Latin America and the Caribbean to liberalize air transport regulations to enable more robust networks. “Air connectivity is lower compared to other regions, with nonstop flights and LCC presence lagging behind,” he explained.

Air traffic in the region could grow more if governments lowered taxes on flight tickets, several speakers said.

“What we have been mentioning to these governments is they need to remain competitive in terms of cost and taxation,” IATA Americas regional VP Peter Cerda said. “There are periods of time in the year—the Caribbean high season—when it’s more expensive to fly from the US to the Caribbean, in some cases, than it is to fly from Miami to Dubai. A lot of it has to do with the amount of taxes and fees that are added onto the ticket.”

Caribbean airline executives said high taxes on airline tickets—sometimes exceeding the base fare—affect both tourism and inter-island travel.

“Our team reached out to me with regard to a customer who received a free ticket from us, paying nothing for the airfare,” Turks and Caicos-based interCaribbean Airways CEO Trevor Sadler said. “And the lady thought there was a big mistake, because how can the cost to her be $200, which was just taxes? She didn’t believe it.”

Hans van de Velde, CEO at Sint Maarten-based Winair, acknowledged that governments see aviation taxes as a reliable revenue source, particularly from international visitors. However, he argued that regional residents should not bear the same tax burden as tourists.

“I can understand many governments making the choice to have high taxes because the international customer is willing to pay,” van de Velde said. “But for the locals, is there a way to tax them less?”

He pointed to Bonaire’s model, where tourists pay a separate entry tax rather than having those fees embedded in airfares.

Sadler questioned whether the tax revenue collected from aviation is being reinvested in airport infrastructure or goes into general government funds.

Van de Velde was blunt on the issue. “To be honest, I don’t know what governments do with these taxes,” he said. “I do see some pretty sad airports in the region where clearly investment has not been made.”

Taxes are not the only cost affecting airlines, which have seen fixed costs escalate after the pandemic, especially for labor. That means the cost gap between LCCs and traditional carriers is closing.

US LCC Allegiant Air VP corporate development and government affairs John Pepper noted that the rise in costs that airlines were seeing—particularly labor costs—were affecting all airlines and had led to a roughly 20% increase in cost per available seat mile (CASM).

“There’s been a close in the CASM gap between LCCs and other airlines,” Pepper said.

Nacim Yala, chief commercial and strategy officer at Arajet, a Dominican Republic-based LCC, added that the LCC and network carrier costs have converged.

“All the variable costs are much closer,” he said. “There has been a dislocation in demand and the low end has suffered.”