The Latin American aviation industry is experiencing significant growth and transformation in 2025. The market is projected to reach USD 59.3 billion by 2034, driven by rising passenger traffic, improved connectivity, and competitive low-cost carriers. In 2022, international passenger traffic surged by 73.2%, creating expansion opportunities for airlines. 

LATAM Airlines, a regional leader, reported a 7.2% increase in capacity and an 83.1% load factor in May 2025, earning recognition as South America's best airline for the sixth consecutive year. The airline also completed a $370 million secondary equity offering and signed an underwriting agreement with J.P. Morgan.

 However, challenges persist, with Brazilian carrier Azul filing for Chapter 11 bankruptcy to restructure $5.6 billion in debt, following similar moves by Avianca, Aeromexico, and Gol. Azul aims to exit bankruptcy by early 2026, supported by $300 million from United and American Airlines. Copa Airlines reported a 7.5% passenger growth in May 2025, with an 87.6% load factor, outperforming regional rivals. 

Colombia is enhancing its aviation dominance with LATAM's new Bogotá–Curaçao route, boosting Caribbean connectivity. Despite growth, the region faces issues like high debt and sustainable fuel shortages