Argentina Has a New Open Skies Policy. What Does It Mean for Air Travel?

Argentina is opening its aviation sector to international competition — a move that could shake up how people fly to and within Argentina.

This weekend, a presidential decree that deregulates commercial aviation comes into effect. The government of President Javier Milei, elected last year on an ultra-libertarian platform, wants to open the country to more competition, including in the aviation industry.

Milei is also trying to sell flag carrier Aerolineas Argentinas, which is owned by the government and has not made a profit in decades. That comes as Argentina remains mired in a profound economic crisis.

Let’s see what the changes might mean for flyers.

Foreign Airlines Can Now Fly Within Argentina

Milei signed a decree in September of this year deregulating domestic flights in Argentina. As CH Aviation reported, this means foreign carriers can operate domestic flights without registering aircraft in the country or hiring local staff. The decree is set to take effect from November 23.

Foreign airlines are normally not allowed to operate point-to-point flights within another country, so this would be a rare case worldwide.

It remains to be seen whether foreign airlines would want to run domestic flights in Argentina. The country is in a deep economic crisis, with inflation at almost 200% yearly and half the population living in poverty.

Foreign airlines would also find themselves competing against 2 established low-cost carriers in Argentina: Flybondi and JetSmart.

Flybondi is a local player, while JetSmart is the Argentinian subsidiary of Chile-based JetSmart. Interestingly, private equity firm Indigo Partners has a controlling stake in both Jet
Smart and U.S.-based Frontier Airlines.

Several far-flung domestic destinations in Argentina, an enormous country, wouldn’t be profitable for commercial carriers. Those are flown at a loss by state-owned Aerolineas because of public service commitments.

Want To Buy Argentina’s State-Owned Airline?

The other leg of Milei’s liberalization program for Argentinian aviation is the sale of Aerolineas Argentinas.

In theory, an airline based in a developed country — with an international network, 80 airplanes ,and 14 million passengers flown last year — would be an attractive prospect for buyers. Aerolineas is also a member of SkyTeam, like Delta Air Lines.

In practice, Aerolineas Argentinas hasn’t made a profit in decades and is plagued by labor conflict between staff and its current owner, the government.

Its onboard product is also lacking. Long-haul business class on the Airbus A330s that serve the U.S. and Europe still have recliner seats, while its North American and European peers all fly lie-flats.

The airline’s unions oppose a sale, and so far there appear to be no serious takers.

Aerolineas Argentinas already experienced private ownership. A consortium led by Spanish airline Iberia owned it from 1991 to 2004, then another private owner held a majority of shares until the airline was nationalized again in 2008.

An Argentinian newspaper wrote earlier this month that Delta Air Lines and Colombia-based Avianca were in talks to buy Aerolineas jointly. Delta said it wasn’t true.

Who Flies to Argentina?

Regardless of what happens to the flag carrier, there are many options to get to Argentina from the U.S.

Buenos Aires has several flights to the U.S., as follows:

• Miami (MIA) on American Airlines and Aerolineas Argentinas
• New York – John F. Kennedy (JFK) on American Airlines and Delta Air Lines
• Atlanta (ATL) on Delta
• Dallas – Fort Worth (DFW) on American
• Houston – George Bush Intercontinental (IAH) on United Airlines

Final Thoughts

Argentina’s president Javier Milei got into office promising to fix a deep economic crisis, and now he has begun to apply his libertarian theories to the aviation industry. That means opening the skies to competition and trying to sell state-owned Aerolineas Argentinas. His office has already removed a requirement for government employees to fly on Aerolineas Argentinas when traveling on business.

It’s far from certain that foreign airlines will swoop in to cover the Argentinian domestic market. But even if that does not happen, you still have plenty of options to fly to and within the country — especially as the ongoing economic crisis gives the U.S. dollar a strong buying power in Argentina.