Argentine aviation will face continuing challenges

Significance

President Javier Milei aims to increase competition in the domestic airline industry, where state-owned Aerolineas Argentinas (AR) retains the largest market share, although penetration by low-cost carriers (LCCs) has increased steadily in the last decade. The government also seeks to develop regional airlines to connect smaller cities, attract foreign investment and promote tourism.

Impacts

• The unstable political and macroeconomic environment, high tax pressure and infrastructure problems may discourage foreign investors.
• Deregulation may help to promote the development of regional airlines.
• Low incomes and population density will make it necessary to continue subsidising unprofitable routes.
• Sector unions will reject the possibility of allowing foreign crew to work on domestic flights as a result of open-skies deals.