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Argentina implements aviation reform to attract foreign airlines

The Argentine government published a sweeping decree on Wednesday (10) aimed at opening up the country’s aviation sector, inviting foreign airlines to enter the market long dominated by state-owned Aerolineas Argentinas.

The reform should increase the number of routes, flight frequencies and bring in more competitors, the transport ministry said in a statement.

Carriers can now apply to operate as many routes and frequencies as they want, subject to safety approval, according to the decree.

Airlines now also have full control over how much they charge for tickets, the decree says, ending a regulation that allowed the government to set a minimum price.

The government of libertarian President Javier Milei, who took office in December, has struck a series of “open skies agreements” with other countries in recent months, allowing their airlines to operate domestic routes in Argentina under certain conditions.

Brazil, Chile, Peru, Ecuador, Panama, Uruguay and Canada have signed agreements so far, potentially opening up the Argentine market to carriers such as Gol, Latam and Air Canada.

The Transport Secretariat said on Wednesday that more such agreements are expected to be signed in the coming months.

Aerolineas Argentinas operated 62% of domestic flights in May, according to the regulator’s latest available data.

Behind it were local low-cost airline Flybondi with 26% of the domestic market and Chilean carrier Jetsmart with 11%.

The future of the state-owned carrier remains uncertain, as Milei has previously said he will privatize the airline. However, an attempt to do so was dropped from a bill passed by Congress last month.

Milei’s spokesman, Manuel Adorni, said in an interview published last week by a local outlet that the government may try to make some state-owned companies, such as Aerolineas, more profitable before trying to privatize them or look for a buyer.

Last year, Aerolineas had a net profit of US$32 million, according to the company.

Unions have sharply criticized the industry reforms, arguing that the government is undermining Aerolineas’ operations and employees to bring in low-cost competitors.

Aerolineas has cut some flight frequencies and reduced its workforce in recent months, according to unions.

Source: CNN Brasil

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