Travel bans, market turmoil and home offices: coronavirus in Latin America

Argentina is imposing restrictions on arrivals from certain countries, and the region's airlines predict $8 billion in losses

Confirmed cases of coronavirus in Latin America are surging. Photo: Shutterstock
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The world crisis surrounding the coronavirus outbreak seems to have reached a new peak. In Latin America, markets tumbled, airlines register losses and governments announce news restrictions in an effort to contain the Covid-19, as new cases are confirmed in the region.

The Ibovespa, the main index for Brazilian stocks, tumbled 14.78%. The circuit breaker mechanism interrupted trading twice during the day, a measure that had not been used since 2008, at the height of the financial crisis. Benchmarks in Mexico (-5.28%), Argentina (-9.76%), Chile (-6.33%) and Colombia (-9.35%) also went down.

Exchange rates also felt the turbulence, with the US dollar rising 1.41% against the Brazilian real, to the new record high of BRL 4.78. In Mexico the U.S. currency climbed 0.87%; in Colombia it rose 0.85% to COL$4,065, breaking the mark of COL$4,000 for the first time, and 0.8% in Argentina.

International markets could tumble even further had the Federal Reserve not intervene and announce an offer of at least $1.5 trillion worth of short-term loans to restore liquidity in banks.

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In Argentina, Clarin informs that the government blocked flights from China, United States, South Korea, Japan, Iran and most of Europe, as part of a framework of preventive measures against the coronavirus pandemic.

According to El Economista, based on the estimates of the International Air Transport Association (IATA), that the economic effects caused by the outbreak on Latin American airlines (which last year mobilized 300 million passengers, 3.9% more than in in 2018) could reach US$ 8 billion dollars. After a positive start in 2020 for the region’s industry, it is expected that from this month on there will be much less passenger traffic.

The executive director of the Latin American and Caribbean Association of Air Transport (ALTA), Luis Felipe de Oliveira, asked people not to panic once the region’s airlines are following the international protocols offered by World Health Organization (WHO).

Brazilian authorities are discussing a relief package to the airlines industry, which may include partial or total tax breaks from companies’ payroll and also exemption from some federal taxes charged on aviation fuel and tickets.

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In Brazil, Valor Econômico reports, firms are increasing restrictions on employees shifts. Given the expectation that the country will soon face a sudden increase in infected people, it is not enough, in the view of these companies and banks, to avoid flights abroad. Many, such as the Brazilian branch of Mastercard and XP Investimentos, closed offices or expanded the use of “home office”, which keeps employees working at home.


With fewer flights, the situation of the airlines worsens. Yesterday, Brazilian Azul‘s stock closed down 16.39% and Gol‘s, 14.57%. Traded on New York, regional leader Latam‘s stock fell 17.79% in March.

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