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Argentina’s government has taken steps to knock down barriers in the country’s aviation sector as part of President Javier Milei’s efforts to liberalize the industry.
The foundation of a decree published by the government on July 10 entails free access to the market for new operators “through short and agile administrative procedures,” encouragement of fair competition between operators, and rate deregulation.
Although two ULCCs—Flybondi and JetSMART Argentina—operate in the country, state-owned Aerolineas Argentinas continues to dominate the market with a systemwide seat share of 47.1% for the week of July 8, according to Aviation Week’s CAPA. Flybondi has an 11.5% share followed by JetSMART at 9.6%.
Aerolineas Argentinas was renationalized in 2008, but earlier in 2024 Bloomberg Intelligence aviation analyst Francois Duflot said, “Javier Milei has made clear he wants a small government and state footprint in the national economy. Privatization of the airline would fit with his plan.”
The government said in the decree that an assessment of the current state of Argentina’s air transport system revealed the country’s “aeronautical policy has strongly limited the development of the commercial aviation industry.”
Some of the changes in policy include authorizing foreign companies to provide internal or international air transportation. The authorities considering those requests “may grant authorizations that include cabotage traffic rights, under conditions of strict reciprocity,” the government said.
Additionally, “companies may freely carry out agreements that involve a consolidation or merger of services and/or businesses, transfer of concessions and/or authorizations in everything related to their non-operational aero-commercial aspects,” as long as it is not a practice prohibited by competition law. Authorities would have 15 days to approve or reject those proposals.
The new decree follows several MOU agreements that Argentina has recently forged with other countries to liberalize air service including Brazil, Chile, Ecuador, Peru, and Uruguay. Argentina and Canada also recently announced a new air service agreement lifting any restrictions on Canadian or Argentinian carriers serving the market or passenger and cargo flights operated by those airlines.
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