Colombian Update October 4th: What's New (S) : Airports, Vehicles, EPM, National Heritage.

AIRPORTS

There have been a few press articles recently in the local press about the growing potential for airline travel here in Colombia and as a recently indoctrinated 'aero-sexual' they rarely go unnoticed and yesterday there was one that again hit one of the principal problem nails on the head. There are plenty of willing airlines looking to expand as demonstrated by VivaAir's 50 plane order with planes starting to arrive this month and the demographics when combined with correct pricing mean there are equally plenty of passengers however that all comes to nothing if the airport taxes are prohibitive. The Chairman of LATAM's local board met with President Duque and afterwards made positive comments about expansion however once again the subject of airport taxes raised its ugly head. The Chairman claimed that 40% of a passengers ticket prices is taken up by costs which have nothing to do with the airlines themselves - his concept is that anything above 25% is excessive. Colombia has long been problematic when it comes to costs, prior to 2012 it was the legacy fuel surcharge which had been in place since 2005 which placed a USD25 (+taxes) on ticket prices - it was the arrival of the same VivaAir which instigated the change to that regulation but not without protest from the legacy players already in-situ. This was changed in conjunction with Aerocivil and it needs similar Government led action to bring down airport charges - at the moment each airport sets its own prices which mean much lower traffic where charges are too high. With President Duque petitioning LATAM to serve smaller cities as well as the more obvious routes hopefully he understands that the resulting economic benefits from opening new routes is sufficient motivation to sit down with the more expensive airports and lobby on behalf of the airlines and their passengers.

VEHICLES As per the cement data this past weekend no-one wants to call the recovery too early but there are apparent green shoots appearing in the vehicle sector. September saw total sales of 21,430 and whilst that is a touch down on August it must be remembered that the only number that matter is the YoY number and that was up 10.9% and helped drag the YTD number to 175,723 which has now moved into the green with an increase of 2.2%. Thus far in 2018 there have been 6 positive months 5 of which have been in the last 6 months, we appear to have momentum which makes sense given the low interest rates currently on offer even though the Peso is not helping greatly. Another data point that is attracting attention for September is the fact that all 8 categories that are calculated were in positive territory with trucks (10.5 tons+) leading the way with a jump of 178%. When it comes to two wheels we had a 8.3% YoY increase and YTD motorbike sales have totaled 308,025 an increase of 9.7%. The country is ever more packed with bikes however many are two-stroke which is poor for the environment however it is also a reflection on the high cost of cars when placed alongside the average salary.

EPM The soap opera continues, if it wasn't for the facts billions of dollars could be lost, 100,000 people were put in danger and that the previously great reputation this company had is being put through the wood chipper - it would be funny, but it isn't and every headline more convince me that the public sector is no longer a fitting forum for this behemoth of an entity. The latest nonsense is with regards to the lie-detector situation which occurred a couple of weeks ago - I wrote that it was a disgrace if used and based on the public information at the time I stand fully by that. However it transpires, again EPM very frugal and late with the information, that the 18 people tested were part of executive and did so voluntarily - I am not sure that makes it any more acceptable but there we go. Meantime the two main shareholders in the Hidroituango project EPM (46%) and the Governor's office (53%) are embroiled in the most undignified slanging match, completely unbecoming of either party. On Monday the Governor published a list of 8 errors made and EPM replied but launched a law suit against the Governor and a member of the council for defamation. The behaviour of both parties has been indefensible since the crisis started, a lack of transparency and stone throwing being just two of a litany of offences. FINALLY

Congress may be very busy playing UFC style party-politics but at the same time it is never too busy for matters of national heritage - the country that brought you Gabriel Garcia Marquez & Fernando Botero is now moving closer to declaring the sport of TEJO as part of its national heritage - the consequence of which is that each and every local authority have to dedicate a small amount of the budget to this pastime. For those unfamiliar with this 500 year old sport it entails hurling a small cannonball at a sand box a short distance away with the idea being that the metal projectile connect with gunpowder packet buried in the sand - an explosion scores the points, all of course washed down with gargantuan amounts of ale. I am all in favour of minority sports so anyone visiting who wants to give it a try please let me know - after the Russian World Cup perhaps a ready made replacement for football.