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dcajet
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Argentina deregulates its domestic airfares

Mon Jul 02, 2018 10:48 pm

The last step needed for a truly low cost environment in the domestic market was announced today by Guillermo Dietrich, Transportation Minister. Effective Aug. 15, airlines will be able to charge as low as they wish for domestic tickets.

No doubt the ULCC operating or planned had been lobbying hard for this measure, but reality is that the minimum prices band (banda tarifaria minima) had long been rendered obsolete by inflation. There were no restrictions in place for max prices. Let the pricing/revenue management fun begin!

https://www.lanacion.com.ar/2149510-des ... -avion-a-1

The measure has been welcomed by all airlines, including AR & LA, but it's opposed by the long haul bus companies.

https://www.lanacion.com.ar/2149532-rep ... s-de-avion
Keep calm and wash your hands.
 
Planeflyer
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Re: Argentina deregulates its domestic airfares

Tue Jul 03, 2018 1:54 am

The fact that this is even a discussion speaks volumes about Argentina and LA.
 
MalevTU134
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Re: Argentina deregulates its domestic airfares

Tue Jul 03, 2018 2:02 am

Planeflyer wrote:
The fact that this is even a discussion speaks volumes about Argentina and LA.

I see what you are trying to say...but you should be a bit more nuanced. Argentina with its current government is moving away from these practices, and a lot of changes for the better have taken place in the last two and a half years.
Also, not all of "LA" is the same. There are very market liberal countries, such as Colombia and Chile, where practices like this have not been tolerated.
 
dcajet
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Re: Argentina deregulates its domestic airfares

Tue Jul 03, 2018 3:10 am

Planeflyer wrote:
The fact that this is even a discussion speaks volumes about Argentina and LA.


I totally get your point. But you don't shed decades of populism and protectionism overnight. As the previous poster has said, a lot was accomplished in the past 30 months. A lot remains to be done.
Keep calm and wash your hands.
 
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PatrickZ80
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Re: Argentina deregulates its domestic airfares

Tue Jul 03, 2018 7:40 pm

Argentina is making steps in the right direction. For a long time South America has been a very expensive continent to fly, large parts of it still are. Take Brazil for example, total lack of LCCs due to LCC-unfriendly laws. Most of the Brazilian population doesnt have access to flying because it's far too expensive for them. Kind of the situation in Europe and the USA before deregulation. Hopefully now that Argentina is setting a good example more countries will follow.
 
402679
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Re: Argentina deregulates its domestic airfares

Wed Jul 04, 2018 12:29 am

PatrickZ80 wrote:
Argentina is making steps in the right direction. For a long time South America has been a very expensive continent to fly, large parts of it still are. Take Brazil for example, total lack of LCCs due to LCC-unfriendly laws. Most of the Brazilian population doesnt have access to flying because it's far too expensive for them. Kind of the situation in Europe and the USA before deregulation. Hopefully now that Argentina is setting a good example more countries will follow.


Dude, do update your database, please.

Don't put all the countries in Latin America as if there were one and the problems around it were the same for all of them. Argentina has its own characteristics and so does Brazil. Just so you know, I think Brazil airfare got deregulated around 2000. Since this topic is about Argentina, it is not worth to explain why does flying is expensive in Brazil and why a "true" LCC have some chances here.
 
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kitplane01
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Re: Argentina deregulates its domestic airfares

Wed Jul 04, 2018 3:45 am

PatrickZ80 wrote:
Argentina is making steps in the right direction. For a long time South America has been a very expensive continent to fly, large parts of it still are. Take Brazil for example, total lack of LCCs due to LCC-unfriendly laws. Most of the Brazilian population doesnt have access to flying because it's far too expensive for them. Kind of the situation in Europe and the USA before deregulation. Hopefully now that Argentina is setting a good example more countries will follow.


Educate me: what are the LCC unfriendly laws in Brazil?
 
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PatrickZ80
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Re: Argentina deregulates its domestic airfares

Wed Jul 04, 2018 6:41 am

kitplane01 wrote:
Educate me: what are the LCC unfriendly laws in Brazil?


I believe there was something about mandatory checked luggage and meal included for free, not exactly sure. On LCCs those things certainly aren't free.
 
winGl3t
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Re: Argentina deregulates its domestic airfares

Wed Jul 04, 2018 3:06 pm

PatrickZ80 wrote:
Take Brazil for example, total lack of LCCs due to LCC-unfriendly laws. Most of the Brazilian population doesnt have access to flying because it's far too expensive for them.


Brazil's airfares are dirty cheap on main routes. Meals onboard have always been deregulated and luggage can be sold apart from the seat since last year.

Take GOL for example. It is Brazil largest airline, which happens to be a LCC, and has an average fare lower than 100 US dollars (334 BRL) for an average stage lenght of over 700 miles (1100km).
Fares on LATAM and Avianca tend to be similar on routes they compete - around 95% of their network.

Only Azul on monopolistic routes (around 70% of their network) charges higher fares.
 
AF086
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Re: Argentina deregulates its domestic airfares

Wed Jul 04, 2018 3:09 pm

PatrickZ80 wrote:
kitplane01 wrote:
Educate me: what are the LCC unfriendly laws in Brazil?


I believe there was something about mandatory checked luggage and meal included for free, not exactly sure. On LCCs those things certainly aren't free.


Free onboard service is at the airlines' discretion for many years and BOB is around for quite some time too. Free checked luggage on domestic flights is no longer compulsory for almost two years IIRC in Brazil.
Last edited by AF086 on Wed Jul 04, 2018 3:39 pm, edited 1 time in total.
Please insert a "smart" joke here.
 
dcajet
Topic Author
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Re: Argentina deregulates its domestic airfares

Wed Jul 04, 2018 3:21 pm

And the fares wars have started in Argentina. Flybondi, the only true LCC operating right now, is offering EPA-COR for around US$12 - a one-hour, 400-mile flight.
Keep calm and wash your hands.
 
bsbisland
Posts: 351
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Re: Argentina deregulates its domestic airfares

Wed Jul 04, 2018 3:30 pm

PatrickZ80 wrote:
Argentina is making steps in the right direction. For a long time South America has been a very expensive continent to fly, large parts of it still are. Take Brazil for example, total lack of LCCs due to LCC-unfriendly laws. Most of the Brazilian population doesnt have access to flying because it's far too expensive for them. Kind of the situation in Europe and the USA before deregulation. Hopefully now that Argentina is setting a good example more countries will follow.


What is happening in Argentina now, happened in Brazil more than 15 years ago and other countries in the region. Brazilian domestic aviation market has multiplied in size since then and airfares are a fraction of what it used to be.

Next step should be Argentina signing an open skies agreement with neighbour countries.
 
Redwood839
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Re: Argentina deregulates its domestic airfares

Wed Jul 04, 2018 3:41 pm

Really good to hear. I've been trying to add Argentina as the last country to visit in SA but it's just too damn expensive to travel domestically. Hopefully this will make my trip to Ushuia possible.
 
PDPsol
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Re: Argentina deregulates its domestic airfares

Wed Jul 04, 2018 7:59 pm

I
 
dcajet
Topic Author
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Re: Argentina deregulates its domestic airfares

Wed Jul 04, 2018 11:15 pm

Redwood839 wrote:
Really good to hear. I've been trying to add Argentina as the last country to visit in SA but it's just too damn expensive to travel domestically. Hopefully this will make my trip to Ushuia possible.


Even w/o this deregulation, I find that airfares in Argentina are quite affordable actually, You can get a r/t AEP or EZE to USH on AR/AU (from EZE it's on the A332, from AEP on the E190, MAX 8 or 738) for around $250 if you are flexible with your dates. Keep in mind it is an almost 4 hour flight each segment.

Now, USH is an expensive destination - I'll give you that, but there are cheaper options like hostels, etc.

PDPsol wrote:
I


Topic left you speechless? ;)
Keep calm and wash your hands.
 
PDPsol
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Re: Argentina deregulates its domestic airfares

Thu Jul 05, 2018 12:45 am

dcajet wrote:
Redwood839 wrote:
Really good to hear. I've been trying to add Argentina as the last country to visit in SA but it's just too damn expensive to travel domestically. Hopefully this will make my trip to Ushuia possible.


Even w/o this deregulation, I find that airfares in Argentina are quite affordable actually, You can get a r/t AEP or EZE to USH on AR/AU (from EZE it's on the A332, from AEP on the E190, MAX 8 or 738) for around $250 if you are flexible with your dates. Keep in mind it is an almost 4 hour flight each segment.

Now, USH is an expensive destination - I'll give you that, but there are cheaper options like hostels, etc.

PDPsol wrote:
I


Topic left you speechless? ;)


Accidental post! I am absolutely THRILLED with this announcement from the Macri administration, prospects for continued growth in the Argentine cabotage market are excellent. Investors behind FlyBONDI, Norwegian Argentina, and now JetSmart have well-developed commercial expansion plans for the Argentine market.

Posters claiming ‘this should have happened years ago’ clearly have NO IDEA regarding the political reality in Argentina following the 2001 default and the disastrous Kirchner administration that ruled the republic until 2015. The policy changes and economic reforms implemented by the Macri administration are nothing short of revolutionary and still insufficient to fully reform the economy. The next 12 months will test this administration’s mettle and the central bank’s capabilities. Let’s hope for the best.

The Argentine commercial aviation sector has unbelievable potential, travel per capita remains well below neighboring Chile and Brasil. Ambitious investors with proven operators will realize handsome rewards for developing the cabotage and regional markets. Let the competition begin!
 
dcajet
Topic Author
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Re: Argentina deregulates its domestic airfares

Thu Jul 05, 2018 1:22 am

PDPsol wrote:
dcajet wrote:
Redwood839 wrote:
Really good to hear. I've been trying to add Argentina as the last country to visit in SA but it's just too damn expensive to travel domestically. Hopefully this will make my trip to Ushuia possible.


Even w/o this deregulation, I find that airfares in Argentina are quite affordable actually, You can get a r/t AEP or EZE to USH on AR/AU (from EZE it's on the A332, from AEP on the E190, MAX 8 or 738) for around $250 if you are flexible with your dates. Keep in mind it is an almost 4 hour flight each segment.

Now, USH is an expensive destination - I'll give you that, but there are cheaper options like hostels, etc.

PDPsol wrote:
I


Topic left you speechless? ;)


Accidental post! I am absolutely THRILLED with this announcement from the Macri administration, prospects for continued growth in the Argentine cabotage market are excellent. Investors behind FlyBONDI, Norwegian Argentina, and now JetSmart have well-developed commercial expansion plans for the Argentine market.

Posters claiming ‘this should have happened years ago’ clearly have NO IDEA regarding the political reality in Argentina following the 2001 default and the disastrous Kirchner administration that ruled the republic until 2015. The policy changes and economic reforms implemented by the Macri administration are nothing short of revolutionary and still insufficient to fully reform the economy. The next 12 months will test this administration’s mettle and the central bank’s capabilities. Let’s hope for the best.

The Argentine commercial aviation sector has unbelievable potential, travel per capita remains well below neighboring Chile and Brasil. Ambitious investors with proven operators will realize handsome rewards for developing the cabotage and regional markets. Let the competition begin!


As you can probably imagine, unions and kirchneristas/peronistas alike are up in arms, drawing comparisons to LAPA in the 90s - and how it ended. In June, and in spite of some economic hiccups, the number of domestic pxs carried continued to grow, but we are seeing some lateral movements from AR/AU and LA to Andes, Avianca and to Flybondi mostly, which now after 5 months in operations commands 7% of the market. Looks like the gravy train for some is about to reach its final station.
Keep calm and wash your hands.
 
Redwood839
Posts: 228
Joined: Mon Jul 13, 2009 4:26 am

Re: Argentina deregulates its domestic airfares

Thu Jul 05, 2018 12:41 pm

dcajet wrote:
Redwood839 wrote:
Really good to hear. I've been trying to add Argentina as the last country to visit in SA but it's just too damn expensive to travel domestically. Hopefully this will make my trip to Ushuia possible.


Even w/o this deregulation, I find that airfares in Argentina are quite affordable actually, You can get a r/t AEP or EZE to USH on AR/AU (from EZE it's on the A332, from AEP on the E190, MAX 8 or 738) for around $250 if you are flexible with your dates. Keep in mind it is an almost 4 hour flight each segment.

Now, USH is an expensive destination - I'll give you that, but there are cheaper options like hostels, etc.

PDPsol wrote:
I


Topic left you speechless? ;)


Maybe I'm looking at the wrong dates, cause a EZE-USH is about $600 a pop when I looked. More than my flight from SJO to get to EZE!
 
dcajet
Topic Author
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Re: Argentina deregulates its domestic airfares

Thu Jul 05, 2018 2:24 pm

You probably are. A 2-3 month out search will yield those flex fares at aerolineas.com. And if you fly to RGA (a 3 hour drive from USH) it is even cheaper.
Keep calm and wash your hands.
 
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Jayafe
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Re: Argentina deregulates its domestic airfares

Thu Jul 05, 2018 6:34 pm

dcajet wrote:
Even w/o this deregulation, I find that airfares in Argentina are quite affordable actually


Last year they tried to charge me more for a EZE-VVI than what IB charged me for MAD-LIM. And was not "just unlucky" or temporary.
 
dcajet
Topic Author
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Re: Argentina deregulates its domestic airfares

Thu Jul 05, 2018 11:06 pm

Jayafe wrote:
dcajet wrote:
Even w/o this deregulation, I find that airfares in Argentina are quite affordable actually


Last year they tried to charge me more for a EZE-VVI than what IB charged me for MAD-LIM. And was not "just unlucky" or temporary.


We were talking about domestic fares. EZE-VVI is an international segment. But yes, international fares in Argentina tend to be higher than say from neighboring countries - more taxes, robust demand& capacity restrain from airlines. You can fly domestic from AEP/EPA to IGR on Andes or Flybondi for a peanut, cross the border to Brazil, fly from IGU to GIG or GRU and then be on your merry way to Europe for 1/3 less than if you take your flight nonstop from EZE to Europe. Even Andes is cashing in on this trend and will begin flying from AEP to IGU as early as next month I believe.

That is why LEVEL and Norwegian have been such a success story in Argentina. LEVEL 9x w to BCN and Norwegian daily to LGW this coming southern summer.
Keep calm and wash your hands.
 
C010T3
Posts: 1956
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Re: Argentina deregulates its domestic airfares

Thu Jul 05, 2018 11:24 pm

The real deregulation in Argentina will take place when route authorities are no longer required for domestic flights.
 
MIflyer12
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Joined: Mon Feb 18, 2013 11:58 pm

Re: Argentina deregulates its domestic airfares

Fri Jul 06, 2018 1:19 am

If they want to have unregulated prices they have to be ready to accept some carriers failing or otherwise exiting the market. That will lead to employment disruptions. If you let carriers apply for state support (say, loan guarantees) and (enjoy) serial bankruptcies you just wind up with the walking (flying) dead.

http://articles.latimes.com/2001/dec/29 ... s/fi-air29
 
AtomicGarden
Posts: 421
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Re: Argentina deregulates its domestic airfares

Fri Jul 06, 2018 1:26 am

dcajet wrote:
PDPsol wrote:
dcajet wrote:

Even w/o this deregulation, I find that airfares in Argentina are quite affordable actually, You can get a r/t AEP or EZE to USH on AR/AU (from EZE it's on the A332, from AEP on the E190, MAX 8 or 738) for around $250 if you are flexible with your dates. Keep in mind it is an almost 4 hour flight each segment.

Now, USH is an expensive destination - I'll give you that, but there are cheaper options like hostels, etc.



Topic left you speechless? ;)


Accidental post! I am absolutely THRILLED with this announcement from the Macri administration, prospects for continued growth in the Argentine cabotage market are excellent. Investors behind FlyBONDI, Norwegian Argentina, and now JetSmart have well-developed commercial expansion plans for the Argentine market.

Posters claiming ‘this should have happened years ago’ clearly have NO IDEA regarding the political reality in Argentina following the 2001 default and the disastrous Kirchner administration that ruled the republic until 2015. The policy changes and economic reforms implemented by the Macri administration are nothing short of revolutionary and still insufficient to fully reform the economy. The next 12 months will test this administration’s mettle and the central bank’s capabilities. Let’s hope for the best.

The Argentine commercial aviation sector has unbelievable potential, travel per capita remains well below neighboring Chile and Brasil. Ambitious investors with proven operators will realize handsome rewards for developing the cabotage and regional markets. Let the competition begin!


As you can probably imagine, unions and kirchneristas/peronistas alike are up in arms, drawing comparisons to LAPA in the 90s - and how it ended. In June, and in spite of some economic hiccups, the number of domestic pxs carried continued to grow, but we are seeing some lateral movements from AR/AU and LA to Andes, Avianca and to Flybondi mostly, which now after 5 months in operations commands 7% of the market. Looks like the gravy train for some is about to reach its final station.


How ironic that they are the first ones to book on Ryanair when flying thru Europe...
You killed a black astronaut, Cyril! That's like killing a unicorn!
 
dcajet
Topic Author
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Re: Argentina deregulates its domestic airfares

Fri Jul 06, 2018 1:48 am

AtomicGarden wrote:

How ironic that they are the first ones to book on Ryanair when flying thru Europe...


:checkmark: :checkmark: :checkmark:
Keep calm and wash your hands.
 
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aemoreira1981
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Re: Argentina deregulates its domestic airfares

Fri Jul 06, 2018 3:31 am

Interesting that another poster mentions LAPA...whose run ended early in the Kirchner regime. Sticking just to aviation, especially with the growth of Flybondi (7 percent market share for an airline that only started flying this year), one has to wonder what this means for LATAM Argentina, apparently the one being left behind in the dust. LATAM needs a good strategy for Argentina and soon; even Avianca will have things covered. When Norwegian finally sets foot in Argentina though, they will have something no one else does---a connecting long-haul international network. I suspect they will also introduce routes to FLL and JFK (both red-eye) when they set foot down---something I would wonder that Norwegian may want is to be able to do long-haul flights as fifth freedoms from Argentina to the USA that then continue on to Europe (i.e., EZE-JFK-LGW).

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