Latin American airlines need prompt government aid or many of them could go out of business as the global coronavirus outbreak forces widespread flight cancellations, the chief of regional airline association ALTA said on Tuesday.
However, Chile’s economy minister dismissed the idea of providing aid to the country’s flagship carrier, the largest in the continent.
ALTA Chief Executive Luis Felipe de Oliveira has been sending letters to governments throughout the region about the “unprecedented” coronavirus crisis, he said in a phone interview, adding to the global pressure from airlines seeking bailouts.
“If the governments do not take drastic and immediate action there could be a bankruptcy pandemic in the region,” he said.
In the United States, where airlines are much more profitable than in Latin America, carriers are pushing for a $50 billion aid package.
Brazil’s government has signaled empathy toward the industry, but did not issue a lifeline that airlines had expected on Monday.
A spokesman for Brazil’s Infrastructure Ministry said details of the aid for airlines were still being worked out on Tuesday.
Chile, home to LATAM Airlines Group (LTM.SN), on Tuesday brushed off incoming LATAM CEO Roberto Alvo’s comments that airlines worldwide will need government help.
“I have heard through social media … that the airline LATAM was asking for government aid,” Economy Minister Lucas Palacio said, according to local outlet Emol.
“I want to be super clear about this,” he said. “We are prioritizing people, and I think it’s rushed. I think it’s wishful thinking, for one company to be asking something of that nature.”
LATAM is appealing to governments, the carrier said on Monday, without elaborating. “We’re in conversations with the governments where we operate to evaluate how we can confront this crisis.”
De Oliveira said the stakes were high and more than 50% of flights in Latin America could be canceled.
LATAM has already said it would cancel 90% of its international flights.
Brazil’s largest airline, Gol Linhas Aereas Inteligentes (GOLL4.SA), said on Tuesday it would cancel all international flights starting next week through the end of June, a day after announcing cancellations of up to 95%.