Air cargo origin destination flows inthe Latin America and the Caribbean (LAC) region are heavilyconcentrated in the largest economies of South America andMexico. With 32.7 percent of the airfreight moved to, from,and within the region, Brazil is the largest cargo market,followed by Colombia and Mexico, with 17.9 percent and 16.0percent, respectively. The relatively small size of the aircargo market in LAC can be explained by: (i) low levels ofdemand for air cargo services (supply responds adequately toa low demand for air cargo services in/from LAC), or (ii)restrictions to a properly functioning market that impedethe air cargo market to reach its full potential. Theanalysis carried out for the preparation of this paperindicates that the low levels of demand is the mostreasonable explanation for the small size of the LAC aircargo market. There is room to improve some regulationswhich would make the air cargo market work more efficientlyand probably at lower costs, but the size and diversity ofthe market will not significantly change as a result.Airport infrastructure quality fairs well overall, althoughsome isolated issues exist in certain airports in LAC.Infrastructure limitations were evaluated through a surveyconducted by an association of LAC airlines (ALTA). Theresults of the survey show that even the worst ratedairports received an acceptable score in absolute terms.Policies aimed at reducing operating costs and related tosoft constraints should also be implemented paperlesscustoms procedures, improved security in airport premisesand streamlining of custom inspection processes.
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