Commercial airlines operating on domestic air routes in Argentina will no longer be subject to a regulated minimum fare, the national government confirmed Monday.
The Transport Ministry hopes the measure — which will come into effect on August 1 — will encourage more companies to enter Argentina’s underdeveloped domestic air travel market, boosting tourism.
“The government wants to boost foreign tourist arrivals and consumption inside the country”, Transport Minister Guillermo Dietrich told El Cronista.
The decision comes after the national government discontinued indexation on the regulated minimum fare in 2016. With annual inflation of 40 percent in 2016 and 25 percent in 2017, this brought commercial air fares in Argentina closer to prices in comparable regional markets. Argentina had been the only country in Latin America to fix a minimum fare for flights.
FlyBondi CEO Julián Cook told the Times in January that his company’s cost structure meant it “could today offer prices much lower than the base fare.”
For his part, Norwegian Air’s public relations director for Argentina, Matías Maciel, told the Times: “We do believe its elimination would make the market more dynamic... We would support such a move but it’s not something we’re speculating on.”