Why the CEO of Airbus for Latin America Is Optimistic About Demand

In an interview with Bloomberg Línea, Arturo Barreira highlighted Mexico and Colombia as standouts and revealed a trend towards the end of first class in new LatAm orders

A220-300 interior cabin at FIDAE Airshow Day 4  ©Airbus SAS 2022 Claudio Santana
September 22, 2023 | 09:24 AM

Bloomberg Línea — After the demand for air travel virtually dropped to zero at the beginning of the pandemic, airlines have recovered, in some cases even surpassing previous levels. For the French manufacturer Airbus, Latin America is part of this trend, with the potential for a significant increase in sales.

“The average age of the global fleet has decreased, and we see a lot of interest in Latin America for replacing aircraft with more efficient models. Today, we have more than 500 deliveries to make in the region,” said the CEO of Airbus for Latin America and the Caribbean, Arturo Barreira, in an interview with Bloomberg Línea.

The Spanish executive mentioned that in terms of demand for air travel, Latin America is slightly ahead of other regions of the world. “We are seeing a greater focus on unit cost and more efficiency by airlines,” explained Barreira, citing that this serves as an incentive for orders.

According to data from the International Air Transport Association (IATA), Latin American airlines saw a 15.5% increase in demand (domestic + international, measured in revenue passenger kilometers, or RPK, in industry jargon) in July compared to the same period last year.


In the domestic segment, in the traditionally busy month of July, companies in the region reported a 25.3% increase in traffic compared to the same period in 2022.

Barreira mentioned that, in terms of air traffic, some markets in the region still need to recover demand in the international segment, but countries like Mexico and Colombia are already well above pre-pandemic levels.

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According to the executive, Mexico never closed its borders during the pandemic. Traffic with the United States also favored the Latin American country.


In the case of Colombia, Barreira stated that although its borders were closed for six months, the country heavily relies on airlines for internal connections. “All of this helped boost the faster recovery in these countries,” he explained.

In his view, Airbus is in a favorable market share position in the region, with a wide portfolio that caters to different sizes and strategies of airlines. The other major manufacturer of large commercial aircraft is American Boeing.

“Mexico and Colombia remain strong, but important markets like Brazil and Chile have also shown positive performance. We are optimistic about the region,” he emphasized.

The executive believes that the new A220 model will be extremely important for Airbus to capture a share of Latin American airline demand on regional routes.


“The A220 is ideal for airlines in the region to use not only on regional flights but also on longer routes. The model can operate for 5 to 6 hours, offering a good combination for our customers,” he said. The A220 is set to compete directly with the Embraer E195-E2 and the Boeing 737 MAX 7 in regional aviation.

The A220-300 can be configured for 120 to 160 seats.

But the French manufacturer also sees potential to continue growing among the region’s airlines in the segment of larger aircraft.


“The A320 is the favorite airplane in the world, and in the region, it is definitely the leader in the markets,” he said.

Regarding the A330 family, according to Barreira, the models can serve various routes, including international ones, such as from São Paulo to Miami. For example, Azul (AZUL4) operates Airbus A330neo aircraft on flights to Fort Lauderdale and Orlando.

“The A330neo engine is 20% more efficient and is a success in the region. We have operators like Azul, Aerolíneas Argentinas, and Boliviana, which recently started operations,” he said.

End of First Class

The Airbus executive commented on the global trend of reducing the availability of first-class seats on airplanes, a trend that had already been occurring in Latin America as well. “We no longer have first class in the region. What we currently see is that airlines want to maximize demand by offering different products,” he said.


The CEO of Airbus for Latin America mentioned the growth of the business class, with an “enhanced” service, replacing first class, as well as the advancement of the premium economy offering and economy class categories with seats that have greater recline. “Airlines are trying to capture those customers who can pay a little more for a different product.”

In Barreira’s view, the offering of first class is likely to continue to exist globally but to a lesser extent. “It is difficult to say that first class will disappear; for some segments, it should remain.”

‘Guaranteed’ Demand

In June, Indian airline IndiGo announced a mega-order of 500 aircraft from Airbus, demonstrating that the aviation sector is experiencing strong global growth. This order, combined with orders for more than 1,500 aircraft from Ryanair and Saudi Riyadh Air earlier in the year (considering other manufacturers in the count), raised doubts among industry analysts about the sustainability of demand.


Airbus has received firm orders for more than 1,000 aircraft since the beginning of the year. “We are predicting that in the next 20 years, the global fleet will double in size. Much of this volume will be replacement with more efficient and sustainable models, with fewer emissions. I do not see these demand numbers as unrealistic,” said Barreira.

According to the latest aerospace industry report from Santander (SANB11), published in March of this year, “commercial aviation is one of the largest industries in the world and over the last three decades, it has been divided between Boeing and Airbus as the main suppliers.” The bank pointed out that these two companies have accounted for approximately 99% of the supply of large commercial aircraft since the 1990s.

“Other major manufacturers have not been able to compete and effectively withdrew from the market, mainly because scale barriers make it extremely difficult for other competitors to enter,” analysts Guilherme Bellizzi Motta and Ricardo Peretti highlighted.


With guaranteed demand, the challenge is to differentiate in the value proposition for customers, in this case, the airlines.

Barreira said that currently, Airbus’ product line is 20% to 25% more fuel-efficient and promises 20% to 25% fewer emissions compared to the previous generation. “For airlines, operating these new aircraft is interesting because they reduce emissions and consumption. We do not believe that our current backlog is unrealistic; we see very strong demand.”

In Latin America, the executive expressed optimism about the pace of fleet renewal, mainly because in many countries, there are no transportation alternatives other than air travel.


“We need aviation in the region not only for economic development but also to connect people within countries, due to complex geography and the lack of transportation alternatives such as trains, for example. For us, it is clear that we will continue to grow.”

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