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Argentina: Government to unleash competition in Air travel sector

By  |  May 31, 2016
Argentina: Government to unleash competition in Air travel sector

A number of airlines have jumped at the chance to re-enter Argentina’s air travel sector, an industry which the government has aimed at doubling in size over the next decade. Several international and regional airlines have already presented plans to expand their presence in the country.

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    Foremost among them is Grupo Avianca, which announced the launch of a new regional airline with a starting investment of $100 million USD, to be based around the city of Córdoba and operating up to 18 turbo-prop passenger aircraft. Two other companies, including LATAM airlines (currently with 25% of the market) and Panama’s Copa airlines, have also shown interest in joining the fray in a market currently dominated by flagship national airlines Aerolíneas Argentinas (with 70% of the market). As a result, the first Public Hearing for evaluating new air travel routes to be held since 2005 will convene in a few days to consider Avianca’s proposals.

    Some commentators have proven sceptical of the government’s plans, citing considerable obstacles and challenges the country must first resolve. “Infrastructure costs in Argentina are excessive. The industry needs to get involved in order to guarantee efficient and affordable services” said Peter Cerdá, vice-president of the International Air Transport Association. Among the challenges faced by the industry are sky-high taxes on passenger tickets, as well as a lack of competition in the refuelling and airport services sectors.

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