Aviation Deregulation: What Do the Measures Announced by the Government Mean?

Recently, President Javier Milei signed a decree aimed at deregulating the aviation sector. This new regulation will make it easier for new airlines and ground service companies to enter and operate in Argentina.

Economist and professional pilot Luis Franco shared insights on the potential benefits of these changes. He noted that the decree expands opportunities for establishing more airlines, whether they are domestically or internationally funded. Franco believes this initiative could genuinely stimulate air transport at various levels.

The measures discussed include transforming flying clubs into small passenger carriers and enhancing larger airports, which could facilitate connections across the country. Additionally, he mentioned that several open skies agreements have been signed with countries such as Chile, Ecuador, Uruguay, and Panama, which will promote reciprocal flight opportunities.

However, Franco also pointed out some challenges associated with deregulation. He highlighted that the country’s infrastructure is quite inadequate and requires significant improvement. Although Argentina received high marks in some areas during a recent audit by the International Civil Aviation Organization (ICAO), it fell short in others, particularly in critical areas.

The biggest opposition to deregulation seems to stem from unions, which resist changes that would allow Aerolíneas Argentinas to compete more directly with other airlines. Franco noted that the airline is already facing competition from low-cost carriers like Flybondi and international companies such as JetSmart, both of which are expanding their operations.

Franco believes that the direction of this policy is positive, especially for reducing ticket prices. He emphasized that it could make air travel more accessible for people living far from major airports. Nevertheless, he pointed out another significant issue: the monopoly over the airport system.

He explained that the concession held by Aeropuertos Argentina 2000 creates an artificial monopoly, limiting competition within a 200 km radius of its airports. Franco concluded by stating that this aspect also needs to be addressed in the future.

Source: https://www.perfil.com/noticias/canal-e/desregulacion-aerea-que-implican-las-medidas-anunciadas-por-el-gobierno.phtml