Argentina encourages foreign airlines to enter state dominated market

12 Jul 2024 CW Team

President Javier Milei's administration, which took office in December, has recently secured several ?open-skies agreements? with other countries. These agreements permit foreign airlines to operate domestic routes in Argentina under certain conditions. Countries that have signed agreements so far include Brazil, Chile, Peru, Ecuador, Panama, Uruguay, and Canada. This potentially opens the Argentine market to airlines such as Gol, LATAM, and Air Canada.

The transportation secretariat expressed optimism that these reforms will increase the number of routes, flight frequencies, and competitors. The statement also mentioned that additional open-skies agreements are expected in the coming months.

As of May, Aerolineas Argentinas operated 62% of domestic flights, followed by local low-cost airline Flybondi with 26%, and Chilean carrier Jetsmart with 11%. The reform aims to boost competition and enhance connectivity.

Regional airports in Argentina have experienced significant growth. Pantnagar airport saw a 55.8% increase in passenger traffic to 110,824, while Shillong airport observed a more than 40% rise in air travellers from the previous fiscal year, partly due to some of the lowest fares in the Northeast.

Despite the reforms, the future of Aerolineas Argentinas remains uncertain. President Milei has previously suggested privatising the airline, but this proposal was removed from an omnibus reform bill passed by Congress last month. Manuel Adorni, Milei's spokesman, indicated in a recent interview that the government might first try to make state-run companies like Aerolineas more profitable before considering privatization.

Aerolineas Argentinas reported a net profit of $32 million last year. However, unions have criticized the reforms, arguing that the government's actions are undermining Aerolineas' operations and employees to favour low-cost competitors. The airline has reduced some flight frequencies and trimmed its workforce in recent months. (Source: ET)

The Argentine government has enacted a comprehensive decree aimed at liberalising the country's aviation sector, encouraging foreign airlines to enter a market long dominated by state-run Aerolineas Argentinas. According to the decree, carriers can now apply to operate as many routes and frequencies as they wish, pending safety approval. President Javier Milei's administration, which took office in December, has recently secured several ?open-skies agreements? with other countries. These agreements permit foreign airlines to operate domestic routes in Argentina under certain conditions. Countries that have signed agreements so far include Brazil, Chile, Peru, Ecuador, Panama, Uruguay, and Canada. This potentially opens the Argentine market to airlines such as Gol, LATAM, and Air Canada. The transportation secretariat expressed optimism that these reforms will increase the number of routes, flight frequencies, and competitors. The statement also mentioned that additional open-skies agreements are expected in the coming months. As of May, Aerolineas Argentinas operated 62% of domestic flights, followed by local low-cost airline Flybondi with 26%, and Chilean carrier Jetsmart with 11%. The reform aims to boost competition and enhance connectivity. Regional airports in Argentina have experienced significant growth. Pantnagar airport saw a 55.8% increase in passenger traffic to 110,824, while Shillong airport observed a more than 40% rise in air travellers from the previous fiscal year, partly due to some of the lowest fares in the Northeast. Despite the reforms, the future of Aerolineas Argentinas remains uncertain. President Milei has previously suggested privatising the airline, but this proposal was removed from an omnibus reform bill passed by Congress last month. Manuel Adorni, Milei's spokesman, indicated in a recent interview that the government might first try to make state-run companies like Aerolineas more profitable before considering privatization. Aerolineas Argentinas reported a net profit of $32 million last year. However, unions have criticized the reforms, arguing that the government's actions are undermining Aerolineas' operations and employees to favour low-cost competitors. The airline has reduced some flight frequencies and trimmed its workforce in recent months. (Source: ET)

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