Argentina is not a country associated with cheap internal flights, but all that is about to change. Thanks to new government deregulation, Argentina domestic flights are set to drop in price. With external low cost carriers eyeing up the market, it could revolutionise travel in the country.
Why are flights so expensive in Argentina?
In an effort to boost tourism, Argentina’s pro-business government has taken a major step to ensure cheap domestic flights Argentina-wide. This was done by scrapping the minimum price floor on domestic flights.
In order to stabilize the airline industry after the 2001 economic crisis, the government set a floor price. Argentina wasn’t the only South American country to do this, and it wasn’t the most expensive either, but it did set the floor very high. Chile followed suit, but Argentina’s price floor was always 50 percent higher than Chile’s. Unsurprisingly, this had side effects. For a start, Argentinians started flying less, but also tourist numbers dropped.
Will cheap domestic flights Argentina be that much cheaper?
While the measures doesn’t come into force until August 15th, people are already getting excited about cheap travel. The low-cost carrier FlyBondi celebrated with a promotional round-trip flight between Buenos Aires and Bariloche starting at just 199 pesos ($7.50).
Regional airline, Latam soon followed suit with a round trip between Buenos Aires and Cordoba for 449 pesos ($19). Previously both flights could cost up to eight times as much.
In addition, these new rules have made many more LLC’s turn their noses southward. Ryanair and Norwegian have both begun the necessary steps to dominate the market. In October 2017, the regulators granted Norwegian permission to begin operations on 152 routes. Ryanair started offering routes to Buenos Aries in June aboard Air Europa, with a clear intent to break into the market.
Avianca, the reincarnation of the regional airline Macair Jet, also hopes to up their tiny fleet of two ATR 72 aircraft to take advantage of the new rules.
Not everyone is celebrating cheaper Argentina domestic flights
However, Argentinian flight costs present a multi layered problem. Pilot wages in the country are some of the highest in the world with pilots regularly taking home more than $10,000 a month. In comparison, US pilots take home an average US$7,456 a month. So it’s hardly surprising, the pilots’ union are not impressed.
Will these low fees last?
While we’ve all been thrilled to see a cheaper Argentine market, we have to wonder if it will stay so. For example, there are only two airports in Buenos Aries: Ezeiza and Aeroparque. This means carriers will still need to fight for slots.
Also, Aeropuertos Argentina 2000 runs 33 of the 38 major airports in Argentina. This near monopoly allows the company full discretion over landing fees – and currently they don’t see any reason to be flexible.
So only time will tell if the combined force of the new government and the big name LLCs will be able to truly shake things up. Let’s just hope they do so smoothly to avoid striking pilots.