WELCOME COFFEE

PROUDLY SPONSORED BY MASTER OF CEREMONY CANDICE KIMMEL PRESIDENT OPENING REMARKS KERRY SYMMONDS MINISTER TOURISM & INTERNATIONAL TRANSPORT THE MAGIC OF AVIATION PETER CERDÁ REGIONAL VICE PRESIDENT, THE AMERICAS AVIATION AS ECONOMIC ENABLER

• LAST YEAR, MORE THAN US$27 BILLION IN TOURISM SPENDING WAS MADE POSSIBLE BY AIR TRAVEL TO THE .

• AND AVIATION SUPPORTS MORE THAN US$35.9 BILLION IN GDP AND OVER 1.6 MILLION JOBS.

• EQUIVALENT TO 14% OF THE TOTAL CARIBBEAN ECONOMY. BEAUTIFUL BEACHES, HISTORY & RICH CULTURE AVIATION AS A LIFE LINE QUESTIONS FOR THE DAY

❖ RIGHT BUSINESS ENVIRONMENT? ❖ OVER-TAXATION? ❖ AWARE OF GLOBAL COMPETITION? ❖ FOSTER INTRA-CARIBBEAN CONNECTIVITY? ❖ TOO MANY AIRLINES IN THE REGION? ❖ CONSOLIDATION? INDUSTRY PROFITS UNDER PRESSURE IN 2018, BUT STILL HIGH PER PAX PROFIT SHOWS WIDE REGIONAL VARIATION RECORD NUMBER OF CITY PAIRS = MORE CHOICE

22,000 4.00

20,000 Unique city pairs 3.50 18,000

16,000 3.00 pairs - 14,000 2.50 12,000

10,000 2.00

8,000 US$/RTK in2014US$ US$/RTK

Number Number unique of city 6,000 Real cost of air transport 1.50

4,000 1.00 2,000

- 0.50 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Source: IATA Economics using data from ICAO, IATA Statistics, SRS Analyzer and our own forecasts INTRA-CARIBBEAN CONNECTIVITY IMPEDIMENTS TO BETTER CONNECTIVITY

TAXES, CHARGES & FEES REGULATORY BARRIERS

INEFFICIENT INFRASTRUCTURE TAXATION EXAMPLE: CARIBBEAN TAXATION EXAMPLE: CARIBBEAN

EACH $1 OF TICKET TAX COULD LEAD TO: OVER 40,000 FEWER FOREIGN PASSENGERS $20M OF REDUCED TOURIST EXPENDITURE 1,200 FEWER JOBS CARTAGENA: 2015 EXAMPLE

AIRPORT FEE REDUCTION

INTERNATIONAL PASSENGERS 52%

TOURIST ARRIVALS 47% CARIBBEAN COMPETES AGAINST GLOBAL DESTINATIONS

MAY 11, 2018 PASSENGERS EXPLORE NEW BEACH DESTINATIONS

MAY 11, 2018 PREPARING FOR TOMORROW 20 YEAR PAX GROWTH OUTLOOK TO 2036

Latin America & The Caribbean INCREMENTAL PAX TRAFFIC GROWTH (2036 VS. 2016) THE FUTURE ROLE OF GOVERNMENT STATES THAT GET IT = POSITIVE OUTCOMES

Singapore Panama Dubai 3 PRIORITIES TO ADVANCE CARRIBEAN AVIATION AGENDA

REVIEW COST STRUCTURES & EXCESSIVE TAXATION TO GLOBAL AVERAGES 1 TO BE COMPETITIVE.

ENSURE GOVERNMENT SEES AVIATION AS A BUSINESS PARTNER AND ECONOMIC 2 ENGINE OF GROWTH.

UPDATE INFRASTRUCTURE & ENHANCE 3 SECURITY AND FACILITATION PRACTICES. THANK YOU KEYNOTE SPEECH DR. WARREN SMITH PRESIDENT WELCOME BY ALTA LUIS FELIPE DE OLIVEIRA EXECUTIVE DIRECTOR ALTA, an association at the service of the industry

Our objective is to contribute to the economic and social development of our nations through a safer, more efficient and sustainable aviation industry in the Latin American and Caribbean region.

To achieve it, ALTA is bringing more companies together to join efforts across the entire industry, from airlines to suppliers, governments and other industry associations.

Latin American and Caribbean Air Transport Association EXECUTIVEExecutive Committee COMMITTEE

PRESIDENT

Hernán Rincón

VICE PRESIDENTS E X E C U T I V E DIRECTOR

Andrés Conesa Tracy Cooper Pedro Heilbron Enrique Cueto Luis Felipe de Oliveira

Latin American and Caribbean Air Transport Association Air Transport continues to outperform Economic Growth in the region

12% 11.1% 9.6%

7.8% 6.2% 6.2% 5.2% 5% 4.4% Traffic Growth 2.8% 2.8% 0.9% GDP Growth 1.3% 0.9% -0.2%

-2% -0.7% 2011 2012 2013 2014 2015 2016 2017

Source: ALTA, World Bank

Latin American and Caribbean Air Transport Association Latin American and Caribbean carriers have doubled passenger traffic during the last 10 years

281M Passengers carried in 2017

7% of World Total

Source: ALTA

Latin American and Caribbean Air Transport Association Latin American and Caribbean Passenger Growth

650 +650M 2035 Million passengers

More than 650 million passengers will travel by airplane in Latin America and the Caribbean in 2035

Latin American and Caribbean Air Transport Association Caribbean Region in Perspective

LATIN AMERICAN & CARIBBEAN AIR TRANSPORT ASSOCIATION GDP

Caribbean GDP, PPP (constant 2011 international $) $120

$100

$80

$60 CAGR: 8.03%

USD Billions USD $40

$20

$0 Source: World Bank 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Latin American and Caribbean Air Transport Association Caribbean Region

• Travel & Tourism total contribution to GDP is around 15% (highest in all regions worldwide)

• Tourism accounts for 1 in every 8 jobs

• 4 times more dependent on tourism that any other region in the world

• Lowest growth rate in Latin America and Caribbean 2,5%

• 30.1M tourist arrivals in 2017, equivalent to 65%+ of total Caribbean population

• Tourist arrivals to the Caribbean represent 2.3% of Global International Tourist arrivals

Latin American and Caribbean Air Transport Association Caribbean Capacity Breakdown

Other Central America 6.2M

3.9M 0.4M

South America

Source: ALTA Analysis based on OAG data

Latin American and Caribbean Air Transport Association Caribbean Region Capacity

Fastest growing markets in the Caribbean (seats offered) 10%

8%

6%

2017 - 4%

2% CAGR 2008 CAGR

0%

-2% Central America Europe South America North America Intra-caribbean

Source: ALTA Analysis based on OAG data

Latin American and Caribbean Air Transport Association CaribbeanCaribbean NA– NA - CapacityCapacity

CAGR 2008-2017 Market Share 40 USA Carriers 3% 79.7% 35 Canada Carriers 20.2% 14%

30 Caribbean Carriers -3.8% 6.3%

25

20

15

10 Million Million Seats

5

0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 USA Canada Caribbean Source: ALTA Analysis based on OAG data

Latin American and Caribbean Air Transport Association Challenges & Opportunities Challenges

• Limited Inter-Region Connectivity • Gaps in Infrastructure • High Government Taxes and ATC • Regulatory Fragmentation Costs • Lack of Consolidation • Fragmented Market

Latin American and Caribbean Air Transport Association Connectivity

• No true Caribbean Hub (over • Intra-Caribbean connections 93% of the Region’s Inter- are mostly dominated by Traffic is non-stop) outside carriers

Latin American and Caribbean Air Transport Association Opportunities

Population: 349 M

SAM-NAM Market

• Caribbean is located in the middle of a population of 736M people • 9 Million Annual Passengers Population: 389 M • Strong Growth: 8.0% CAGR • 21 Competing Carriers

Source: ALTA Analysis

Latin American and Caribbean Air Transport Association Positive Examples

Latin American and Caribbean Air Transport Association Joint ventures and agreements

ALTA/IATA ISSA program for Latin America and Caribbean

Latin American and Caribbean Air Transport Association Financial Park building, office 23G, Costa del Este, Panama City - Panama

ALTA Latin American and Caribbean Air http://www.alta.aero @ALTA_aero Transport Assoc. REGULATORY PANEL: RECOGNIZING AVIATION AS ECONOMIC DRIVER

CHRISTOPHER BARKS FAA PAULINE YEARWOOD CARICOM MAURICIO NICHOLLS RUBIS VINCENT VANDERPOOL-WALLACE BEDFORDBAKER GROUP NARI WILLIAMS-SINGH CIVIL AVIATION AUTHORITY NETWORKING COFFEE BREAK PROUDLY SPONSORED BY KEYNOTE PRESENTATION: AIR TRANSPORT, COMPETITIVENESS & CONNECTIVITY DAMIEN REEVES ECONOMIST

JAMES WILTSHIRE HEAD OF POLICY ANALYSIS OUTLINE

❖ CONNECTIVITY IN THE CARIBBEAN ❖ CAUSES OF LOST CONNECTIVITY ❖ CONSUMER IMPACTS OF LOST CONNECTIVITY ❖ ECONOMIC IMPACTS OF LOST CONNECTIVITY ❖ CONCLUSIONS & POLICY RECOMMENDATIONS

Airline Industry Economics Advisory Workshop 2016 49 AVIATION AS AN ECONOMIC ENGINE

Airline Industry Economics Advisory Workshop 2016 50 HIGH LEVELS OF DEPENDENCY ON AIR TRANSPORT

Departures per Capita, 2017

Global average = 0.5

Source: IATA Economics based on PaxIS, World Bank GROWTH RATES VARY WIDELY ACROSS THE REGION

Passenger Growth by Country, 2007-17

Source: IATA Economics based on DDS THE IMPORTANCE OF CONNECTIVITY Direct Connectivity • Reflects direct services available from a given airport; • Measured by number of destinations and/or destination importance; • Can also consider frequency.

Indirect Connectivity • Reflects destinations that only be reached with one or more stops; • Connections weighted in terms of their quality; • Key factors: connecting time and relative diversion. ‘Hub’ Connectivity • For hub airports reflects the number of flight pairs that can be connected taking into account mínimum and máximum connecting times. • As with indirect connectivity, connections can be weighted by quality in terms of diversion factor and connecting times CUBA & DOMINICAN REP. LEAD IN CONNECTIVITY Global Air Connectivity at City Level, 2018

Source: IATA Economics based on SRS Analyzer DECOUPLING BETWEEN INTRA & EXTRA REGIONAL Passenger Growth by Region, 2007-17

Source: Intervistas based on data provided by IATA GLOBAL CONNECTIVITY MOSTLY INCREASING

Change in Global Connectivity 2008 to 2018

Source: Intervistas based on data provided by IATA INTRA-REGIONAL CONNECTIVITY CONTRACTING

Change in Regional Connectivity 2008 to 2018

Source: IATA Economics CAUSES OF LOST CONNECTIVITY

High costs, taxes, Lack of Inefficient and fees regulatory operations harmonisation SHORT ROUTES CHALLENGING COMMERCIALLY

Yield vs Distance by Country

Source: IATA Economics based on PaxIS SHORT ROUTES CHALLENGING COMMERCIALLY Average Revenue Per Passenger Per Kilometre, 2016

Global Average = USD0.08

Source: IATA Economics based on PaxIS HIGH COSTS ADD TO THE CHALLENGE

Average airport charges per passenger (one-way)

Source: IATA Aviation Charges Intelligence Center 61 BURDEN OF TAXES HIGHEST WITHIN REGION Taxes, fees and charges (for return travel in June 2018)

Extra-Regional Intra-Regional

Source: CDB based on LIAT, CAL, , AA, Copa CARTAGENA SHOWED IMPACT OF CUTTING TFCs

AIRPORT FEE REDUCTION

INTERNATIONAL PASSENGERS 52%

TOURIST ARRIVALS 47% INFRASTRUCTURE UTILIZATION RELATIVELY LOW Movements per hour, by airport Departures Arrivals

MBJ NAS

POS BGI

64 CAUSES OF LOST CONNECTIVITY

High costs, taxes, Lack of Inefficient and fees regulatory operations harmonisation CONSUMER BENEFITS OF INCREASED CONNECTIVITY

66 POLICY REFORM WILL INCREASE TRAFFIC

Incremental Passenger Traffic, 2025 (%)

Source: InterVistas analysis 67 SIGNIFICANT WIDER ECONOMIC BENEFITS

Total Incremental Employment Total Incremental GDP (USD mn) BMC Total: 106k; All total: 207k BMC Total: $1.5 bn; All total: $3.3 bn

Source: InterVistas analysis 68 SIGNIFICANT WIDER ECONOMIC BENEFITS

Suggested Strategies: Reduce Costs Harmonise Regulations Enhance Efficiency

INCREASED AIR CONNECTIVITY & ECONOMIC TRAVEL DEMAND TIME SAVINGS IMPACTS

E.g., a 25% reduction in E.g., the to E.g., Policy changes could taxes may increase traffic in Kingston travel time could provide additional 140K BMCs by 13% by 2036 reduce from 5 - 8 to 3 hours jobs in the sector by 2036

69 POLICY CONCLUSIONS & RECOMMENDATIONS

ACTIONS FOR CONSIDERATION BY GOVERNMENTS: ❖ STIMULATE DEMAND AND CONNECTIVITY BY REDUCING TAXES & CHARGES TO MAKE AIR TRAVEL MORE AFFORDABLE ❖ STRENGTHEN EFFORTS TOWARDS REGULATORY HARMONIZATION, INCLUDING ENHANCED MARKET ACCESS ❖ ENHANCE EFFICIENCY E.G. CUSTOMS & BORDER, INFRASTRUCTURE, AIR TRAFFIC MANAGEMENT ❖ INCREASE COLLABORATION BETWEEN COUNTRIES AND BETWEEN AIR TRANSPORT AND TOURISM SECTORS, INCLUDING THROUGH INTEGRATED DEVELOPMENT STRATEGIES ❖ TARGETED MEASURES TO SUPPORT DEVELOPMENT OF NEW ROUTES

70 AIR TRANSPORT, COMPETITIVENESS & CONNECTIVITY

THANK YOU!

71 Airline Industry Economics Advisory Workshop 2016 72 EXECUTIVE PANEL: CHALLENGES FACING THE CARIBBEAN AVIATION GROWTH & INTRA-ISLAND CONNECTIVITY JULIAN ROGERS ROGERS MEDIA HOUSE RAVI DARYANANI PRINCESS JULIANA INTERNATIONAL AIRPORT HUGH RILEY CARIBBEAN TOURISM ORGANIZATION JULIE REIFER-JONES LIAT TRACY COOPER BAHAMASAIR NETWORKING LUNCH PROUDLY SPONSORED BY

CARIBBEAN MINISTERIAL ROUNDTABLE

JULIAN ROGERS ROGERS MEDIA HOUSE DIONISIO D’AGUILAR GOVERNMENT OF BAHAMAS ANNETTE FERGUSON GOVERNMENT OF DOMINIC FEDEE GOVERNMENT OF SAINT LUCIA ZITA JESUS-LEITO GOVERNMENT OF CURACAO KERRIE SYMMONDS GOVERNMENT OF NETWORKING COFFEE BREAK PROUDLY SPONSORED BY PANEL DISCUSSION: PREPARING CARIBBEAN AIRPORTS TO MEET TODAY’S DEMAND & TOMORROW’S GROWTH BRIAN SAMUEL CARIBBEAN DEVELOPMENT BANK GEORGE ANDLER TSA JAMES FAZIO ARUBA AIRPORT AUTHORITY ALVARO LEITE AEROPUERTOS DOMINICANOS AUDLEY DEIDRICK JAMAICA AIRPORT AUTHORITY PEDRO ALVES VISION BOX KEY-TAKEAWAYS & CLOSING REMARKS ANNALEEN LORD AREA MANAGER, CARIBBEAN PRIZE RAFFLE ANNALEEN LORD AREA MANAGER, CARIBBEAN Platinum Sponsors

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