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1 WELCOME COFFEE PROUDLY SPONSORED BY

2 MASTER OF CEREMONY CANDICE KIMMEL PRESIDENT

3 OPENING REMARKS KERRY SYMMONDS MINISTER TOURISM & INTERNATIONAL TRANSPORT

4 THE MAGIC OF AVIATION PETER CERDÁ REGIONAL VICE PRESIDENT, THE AMERICAS

5 AVIATION AS ECONOMIC ENABLER LAST YEAR, MORE THAN US$27 BILLION IN TOURISM SPENDING WAS MADE POSSIBLE BY AIR TRAVEL TO THE CARIBBEAN. 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.

6 BEAUTIFUL BEACHES, HISTORY & RICH CULTURE

7 AVIATION AS A LIFE LINE

8 QUESTIONS FOR THE DAY RIGHT BUSINESS ENVIRONMENT? OVER-TAXATION? AWARE OF GLOBAL COMPETITION? FOSTER INTRA-CARIBBEAN CONNECTIVITY? TOO MANY AIRLINES IN THE REGION? CONSOLIDATION?

9 INDUSTRY PROFITS UNDER PRESSURE IN 2018, BUT STILL HIGH

10 PER PAX PROFIT SHOWS WIDE REGIONAL VARIATION

11 Number of unique city-pairs US$/RTK in 2014US$ RECORD NUMBER OF CITY PAIRS = MORE CHOICE 22,000 20,000 18,000 Unique city pairs ,000 14,000 12,000 10,000 8, ,000 4,000 2,000 Real cost of air transport Source: IATA Economics using data from ICAO, IATA Statistics, SRS Analyzer and our own forecasts 0.50

12 INTRA-CARIBBEAN CONNECTIVITY

13 IMPEDIMENTS TO BETTER CONNECTIVITY TAXES, CHARGES & FEES REGULATORY BARRIERS INEFFICIENT INFRASTRUCTURE

14 TAXATION EXAMPLE: CARIBBEAN

15 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

16 CARTAGENA: 2015 EXAMPLE AIRPORT FEE REDUCTION INTERNATIONAL PASSENGERS 52% TOURIST ARRIVALS 47%

17 CARIBBEAN COMPETES AGAINST GLOBAL DESTINATIONS MAY 11, 2018

18 PASSENGERS EXPLORE NEW BEACH DESTINATIONS MAY 11, 2018

19 PREPARING FOR TOMORROW

20 20 YEAR PAX GROWTH OUTLOOK TO 2036 Latin America & The Caribbean

21 INCREMENTAL PAX TRAFFIC GROWTH (2036 VS. 2016)

22 THE FUTURE ROLE OF GOVERNMENT

23 STATES THAT GET IT = POSITIVE OUTCOMES Dubai Singapore Panama

24 3 PRIORITIES TO ADVANCE CARRIBEAN AVIATION AGENDA 1 REVIEW COST STRUCTURES & EXCESSIVE TAXATION TO GLOBAL AVERAGES TO BE COMPETITIVE. 2 ENSURE GOVERNMENT SEES AVIATION AS A BUSINESS PARTNER AND ECONOMIC ENGINE OF GROWTH. 3 UPDATE INFRASTRUCTURE & ENHANCE SECURITY AND FACILITATION PRACTICES.

25 THANK YOU

26 KEYNOTE SPEECH DR. WARREN SMITH PRESIDENT

27 WELCOME BY ALTA LUIS FELIPE DE OLIVEIRA EXECUTIVE DIRECTOR

28 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

29 EXECUTIVE Executive Committee COMMITTEE P R E S I D E N T Hernán Rincón V I C E P R E S I D E N T S E X E C U T I V E D I R E C T O R Andrés Conesa Tracy Cooper Pedro Heilbron Enrique Cueto Luis Felipe de Oliveira Latin American and Caribbean Air Transport Association

30 Air Transport continues to outperform Economic Growth in the region 12% 11.1% 9.6% 7.8% 5% 4.4% 2.8% 2.8% 6.2% 6.2% 1.3% -0.2% 0.9% 5.2% 0.9% Traffic Growth GDP Growth -2% -0.7% Source: ALTA, World Bank Latin American and Caribbean Air Transport Association

31 Latin American and Caribbean carriers have doubled passenger traffic during the last 10 years 281M Passengers carried in % of World Total Latin American and Caribbean Air Transport Association Source: ALTA

32 Latin American and Caribbean Passenger Growth 650 Million passengers +650M 2035 More than 650 million passengers will travel by airplane in Latin America and the Caribbean in 2035 Latin American and Caribbean Air Transport Association

33 Caribbean Region in Perspective L A T I N A M E R I C A N & C A R I B B E A N A I R T R A N S P O R T A S S O C I A T I O N

34 USD Billions GDP $120 Caribbean GDP, PPP (constant 2011 international $) $100 $80 $60 CAGR: 8.03% $40 $20 Source: World Bank $ Latin American and Caribbean Air Transport Association

35 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

36 Caribbean Capacity Breakdown Central America 6.2M Other 3.9M 0.4M South America Source: ALTA Analysis based on OAG data Latin American and Caribbean Air Transport Association

37 CAGR Caribbean Region Capacity 10% Fastest growing markets in the Caribbean (seats offered) 8% 6% 4% 2% 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

38 Million Seats Caribbean NA - Capacity Caribbean NA Capacity CAGR Market Share USA Carriers 3% 79.7% Canada Carriers 20.2% 14% Caribbean Carriers -3.8% 6.3% USA Canada Caribbean Latin American and Caribbean Air Transport Association Source: ALTA Analysis based on OAG data

39 Challenges & Opportunities

40 Challenges Limited Inter-Region Connectivity High Government Taxes and ATC Costs Fragmented Market Gaps in Infrastructure Regulatory Fragmentation Lack of Consolidation Latin American and Caribbean Air Transport Association

41 Connectivity No true Caribbean Hub (over 93% of the Region s Inter- Traffic is non-stop) Intra-Caribbean connections are mostly dominated by outside carriers Latin American and Caribbean Air Transport Association

42 Opportunities Population: 349 M SAM-NAM Market Caribbean is located in the middle of a population of 736M people Population: 389 M 9 Million Annual Passengers Strong Growth: 8.0% CAGR 21 Competing Carriers Source: ALTA Analysis Latin American and Caribbean Air Transport Association

43 Positive Examples Latin American and Caribbean Air Transport Association

44 Joint ventures and agreements ALTA/IATA ISSA program for Latin America and Caribbean Latin American and Caribbean Air Transport Association

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

46 REGULATORY PANEL: RECOGNIZING AVIATION AS ECONOMIC DRIVER CHRISTOPHER BARKS FAA PAULINE YEARWOOD CARICOM MAURICIO NICHOLLS RUBIS VINCENT VANDERPOOL-WALLACE BEDFORDBAKER GROUP NARI WILLIAMS-SINGH JAMAICA CIVIL AVIATION AUTHORITY

47 NETWORKING COFFEE BREAK PROUDLY SPONSORED BY

48 KEYNOTE PRESENTATION: AIR TRANSPORT, COMPETITIVENESS & CONNECTIVITY DAMIEN REEVES ECONOMIST JAMES WILTSHIRE HEAD OF POLICY ANALYSIS

49 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

50 AVIATION AS AN ECONOMIC ENGINE Airline Industry Economics Advisory Workshop

51 HIGH LEVELS OF DEPENDENCY ON AIR TRANSPORT Departures per Capita, 2017 Global average = 0.5 Source: IATA Economics based on PaxIS, World Bank

52 GROWTH RATES VARY WIDELY ACROSS THE REGION Passenger Growth by Country, Source: IATA Economics based on DDS

53 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

54 CUBA & DOMINICAN REP. LEAD IN CONNECTIVITY Global Air Connectivity at City Level, 2018 Source: IATA Economics based on SRS Analyzer

55 DECOUPLING BETWEEN INTRA & EXTRA REGIONAL Passenger Growth by Region, Source: Intervistas based on data provided by IATA

56 GLOBAL CONNECTIVITY MOSTLY INCREASING Change in Global Connectivity 2008 to 2018 Source: Intervistas based on data provided by IATA

57 INTRA-REGIONAL CONNECTIVITY CONTRACTING Change in Regional Connectivity 2008 to 2018 Source: IATA Economics

58 CAUSES OF LOST CONNECTIVITY High costs, taxes, and fees Lack of regulatory harmonisation Inefficient operations

59 SHORT ROUTES CHALLENGING COMMERCIALLY Yield vs Distance by Country Source: IATA Economics based on PaxIS

60 SHORT ROUTES CHALLENGING COMMERCIALLY Average Revenue Per Passenger Per Kilometre, 2016 Global Average = USD0.08 Source: IATA Economics based on PaxIS

61 HIGH COSTS ADD TO THE CHALLENGE Average airport charges per passenger (one-way) Source: IATA Aviation Charges Intelligence Center 61

62 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, BahamasAir, AA, Copa

63 CARTAGENA SHOWED IMPACT OF CUTTING TFCs AIRPORT FEE REDUCTION INTERNATIONAL PASSENGERS 52% TOURIST ARRIVALS 47%

64 INFRASTRUCTURE UTILIZATION RELATIVELY LOW Movements per hour, by airport Departures Arrivals MBJ NAS POS BGI 64

65 CAUSES OF LOST CONNECTIVITY High costs, taxes, and fees Lack of regulatory harmonisation Inefficient operations

66 CONSUMER BENEFITS OF INCREASED CONNECTIVITY 66

67 POLICY REFORM WILL INCREASE TRAFFIC Incremental Passenger Traffic, 2025 (%) Source: InterVistas analysis 67

68 SIGNIFICANT WIDER ECONOMIC BENEFITS Total Incremental Employment BMC Total: 106k; All total: 207k Total Incremental GDP (USD mn) BMC Total: $1.5 bn; All total: $3.3 bn Source: InterVistas analysis 68

69 SIGNIFICANT WIDER ECONOMIC BENEFITS Suggested Strategies: Reduce Costs Harmonise Regulations Enhance Efficiency INCREASED AIR TRAVEL DEMAND E.g., a 25% reduction in taxes may increase traffic in BMCs by 13% by 2036 CONNECTIVITY & TIME SAVINGS E.g., the Bridgetown to Kingston travel time could reduce from 5-8 to 3 hours ECONOMIC IMPACTS E.g., Policy changes could provide additional 140K jobs in the sector by

70 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

71 AIR TRANSPORT, COMPETITIVENESS & CONNECTIVITY THANK YOU! 71

72 Airline Industry Economics Advisory Workshop

73 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

74 NETWORKING LUNCH PROUDLY SPONSORED BY

75

76 CARIBBEAN MINISTERIAL ROUNDTABLE JULIAN ROGERS ROGERS MEDIA HOUSE DIONISIO D AGUILAR GOVERNMENT OF BAHAMAS ANNETTE FERGUSON GOVERNMENT OF GUYANA DOMINIC FEDEE GOVERNMENT OF SAINT LUCIA ZITA JESUS-LEITO GOVERNMENT OF CURACAO KERRIE SYMMONDS GOVERNMENT OF BARBADOS

77 NETWORKING COFFEE BREAK PROUDLY SPONSORED BY

78 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

79 KEY-TAKEAWAYS & CLOSING REMARKS ANNALEEN LORD AREA MANAGER, CARIBBEAN

80 PRIZE RAFFLE ANNALEEN LORD AREA MANAGER, CARIBBEAN

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