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Good afternoon. Welcome to Miami! Bienvenidos a Miami! bem-vindo a Miami!

It is very fitting that we are celebrating our 70th Anniversary in Miami, less than 400km away from Havana, where we were founded in 1945. Miami is a great reminder of the important impact aviation has on the world. And of course you know how strong Miami’s ties are to Latin America, reinforced with a hub airport that also delivers global connectivity.

This is the fifth time the AGM is being held in the United States and the first time in the city of Miami, which also happens to be the location of our Regional Office for the Americas, with about 160 employees.

So thank you for attending the AGM and as IATA’s Regional Vice President of the Americas, thank you for coming to our home city!

First I would like to provide you with a brief overview of the state of the industry in our Americas region.

Our industry drives economic growth, creates jobs and facilitates business opportunities. Aviation’s global annual economic impact is estimated at $2.4 trillion and it supports 3.4% of global GDP.

In the Latin American/Caribbean region—which I will refer to as the region for simplicity’s sake, aviation supports more than 4.9 million jobs and contributes $153 billion to regional GDP, including the benefits of travel and tourism.

In the region, passenger markets could rise from 242 million passengers today to 385 million passengers over the next 10 years. To meet that demand, our industry needs to grow. And to grow, we need to work closely with the region’s governments and urge them to address infrastructure bottlenecks, embrace smarter regulation and observe global best practices.

Growing also means generating adequate returns to attract new investors.

2015 Quarter 1 operating margins in the region rose to 5.3% from -3.6% in Quarter 1 of 2014. And although Brazil is still in recession and the Argentine economy flat, there is solid growth in Colombia, Chile as well as north of the region, in the United

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States.

Currency weakness is a problem though with a 10% fall in Brazil and 5% in Argentina while exchange rates in Colombia and Chile are holding their ground against the US Dollar.

In summary, there are several economic growth hot spots, but the region is held back by weakness in the largest economies where we see patchy growth in travel markets and cargo. Despite this, 2015 Quarter 1 regional profits show a sharp improvement on last year.

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Our members’ ability to meet rising demand depends heavily on the availability of suitable airport infrastructure. Lack of adequate capacity is a significant problem across this region.

According to the World Economic Forum, only two economies, Panama and Barbados, rank among the top 35 countries for the quality of their air transport infrastructure. Among some of the larger economies, Brazil is ranked 131st, Colombia is 105th and Mexico is 64th.

For example, Brazil has 13 airports with capacity constraints. In addition, Buenos Aires AEP, Antigua, Caracas, and Bogota are lacking capacity and delays in needed airport infrastructure are blocking capacity growth in Lima.

But we have seen some positive developments as well. In Colombia, we are working with the government and the industry to redesign the airspace that will enhance operational performance and increase capacity.

The decision to build a new airport for Mexico City certainly is welcome news and IATA is working closely with the Mexican government and industry stakeholders to ensure the new airport will meet the needs of future travelers at a reasonable cost

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and IATA will sign an MOU this afternoon to cooperate in the construction process.

But the new Mexico City Airport is not expected to be operational until at least 2020 and the current airport is operating nearly at capacity limiting the expansion of the key Mexican market.

Chile has been a role model of an efficient aerospace industry. The pillars on which this is founded are: Open skies policy, regulatory framework that encourages development and investment in aviation, institutions that support aviation, a successful airline business model and an airport concession model that has permitted revenue to be reinvested into aviation industry.

Of course, many governments are looking to airport privatization and concessions to speed up infrastructure improvements. Creative ways to finance airport development are always welcome, provided they align with ICAO’s policies that make States responsible for the economic oversight of commercialized or privatized airports. They must ensure that key charging principles of non-discrimination, cost-relatedness, transparency and consultation with users are followed. And that applies to both public and private airports.

This region has seen too many privatizations that failed to deliver better and more efficient infrastructure because they did not follow global standards and practices.

It is clear that whatever actions are taken, the region’s capacity shortage will not be solved overnight. So it will be necessary to manage scarce runway resources. The IATA Worldwide Slot Guidelines (WSG) is the standard at 165 slot-constrained airports. And because slot-constrained airports around the world apply the WSG, any local proposals that deviate from them have a major impact on airline operations and schedule planning.

An airline operating from Mexico City to Madrid needs a consistent set of rules at both ends of the route. That is why we are concerned to see some governments implementing slot management procedures that do not follow the WSG in the misguided hope of extracting additional capacity from congested airport infrastructure.

A positive development in Colombia is that Bogota’s El Dorado International Airport has been officially declared a level 3 slot airport in accordance with WSG.

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Governments need to understand that the real value of aviation is the global connectivity it provides and the growth and development it stimulates, not the fees and tax receipts that can be extracted from it. But unfortunately, our industry is still viewed as a cash cow that is heavily taxed by governments in spite of its economic benefits.

For example, fuel in Brazil is some of the most expensive in the world, representing 34% of airline costs vs. the 26% global average in 2015. This is due to the Petrobras’s (state oil company) corner on the fuel market in Brazil. Even though 75% of oil is produced in Brazil, it is priced as if it were imported, undermining the growth of aviation in the country. This artificial pricing also stifles potential competition.

Another example is the Caribbean. Taking the islands as a whole, each $1 of ticket tax could lead to over 40,000 fewer foreign passengers, US$20m of reduced tourist expenditure and 1,200 fewer jobs.

In general, there is a lack of transparency across the region and we can see a clear trend to burden airlines and their passengers with taxes and user charges. There are some 47 different types of taxes and charges in Central and South America, and 34 more for the Caribbean. Some are meant to foster tourism, but this makes no sense

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since in the end what taxes do is exactly the opposite: taxes harm tourism and the economy of the states imposing them.

And we continue to see an extreme example of that mindset at work in Venezuela, where to support the economy, the government is refusing to permit airlines to repatriate their own money. Currently, the amount owed to our Member Airlines totals US$3.7 billion. IATA will continue to meet with officials to try to resolve this situation.

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As the global trade association, we believe the global standard approach is also a good model for other areas of commercial regulation, consumer protection among them.

No airline wants to disappoint its passengers and all airlines work hard to avoid delays and cancellations. But what we are seeing in this region is that consumer protection is becoming increasingly prescriptive, thus making it more challenging for airlines to comply with countries’ differing requirements.

Currently, 11 countries in the region have consumer protection regimes and new regulations are being considered in five countries. No effort is made to harmonize these differing requirements, resulting in confusion and frustration for customers.

For example, in Brazil, the aviation sector continues to be burdened with the interference of legal claims that rule in favor of passengers without regard to international laws and conventions that regulate these matters. IATA continues to advocate for adherence to MC99 through seminars, forums, meetings and public audiences promoting industry best practices and IATA and ICAO Core Principles.

Regional regulatory harmonization is needed in our region to allow the aviation

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industry in the Americas to compete with other regions in the world.

To give you a specific example, a few weeks ago, we urged the National Congress of Brazil to observe global best practices should it undertake an amendment of Brazil's laws regarding air crew duty and flight time requirements.

We emphasized that duty and flight time, like other aviation-related activities, should be aligned with the well-established provisions of the International Civil Aviation Organization (ICAO). ICAO provides global standards and guidance for the regulation of fatigue management based on scientific principles which ensure proper flight crew rest and optimal performance. In the cases where governments wish to intervene further, programs such as the Fatigue Risk Management System (FRMS), supported by Safety Management System (SMS) protocols maintain safety in an efficient operating framework. These programs are supported by IATA, ICAO and the International Federation of Air Line Pilots’ Associations.

And current regulations regarding flight crew duty times are based on extensive research, industry experience and best practices. The changes being proposed in Brazil will not improve safety, but will make Brazil less competitive on the global stage and we therefore urge governments to observe global best practices.

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Safety continues to be our number 1 priority and in spite of the tragic and horrible high profile incidents over the past year, our industry has experienced the safest year ever in 2014.

In the Americas, safety has significantly improved over the last decade and no fatalities for IOSA certified airlines in the region have occurred in the last five years.

The few accidents that we do experience in our region typically occur with small operators that are not members of IATA and ALTA and are not IOSA certified, Therefore, we have developed the IATA Standard Safety Assessment (ISSA) Program for airlines that do not meet IOSA criteria owing to the type of aircraft they operate, improving safety measures not only for our members, but the entire industry.

IATA is also collaborating with ICAO and States to implement PBN technology that will reduce the risk of un-stabilized approaches and through IATA’s Global Aviation Data Management (GADM) program, we are aiming to integrate all sources of operational data received from various channels and IATA’s unique programs, such as Flight Operations, Infrastructure, IATA audits, etc. into a common and interlinked database structure.

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With GADM, IATA will be in a position to provide the industry with comprehensive, cross-database analysis and support a proactive data-driven approach for advanced trend analysis and predictive risk mitigation.

Over the next few days, we look forward to discussing these critical topics with our senior executives and we look forward to interesting debates on a variety of issues.

Thank you once again for coming to Miami to attend the 71st IATA AGM and with that, I would like to take your questions now. In English, o en espanol.

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Over the next few days, we look forward to discussing these critical topics with our senior executives and we look forward to interesting debates on a variety of issues.

Thank you once again for coming to Miami to attend the 71st IATA AGM and with that, I would like to take your questions now. In English, o en espanol.

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