To Holger Paulmann, CEO of Chilean SKY Airline, there are two factors that will allow Argentina to improve its low-cost market for air travel: eliminate the established minimum price of flights for each destination and lower the airport taxes.
What does each one mean? The first: the Argentine government forces airlines charge a minimum amount for a ticket. The rule was imposed in 2002 to guarantee companies would make a profit from their flights as the market — same as with the entire country — was in full blown economic crisis at the time.
The second: in order to finance themselves, airports charge taxes that are added to the cost of the ticket — that without taking into account the money they receive from the State. For example, the boarding tax from Argentina to Chile costs US $70, and US $30 from Chile to Argentina.
Paulmann told La Nación that it comes to low-cost airlines, “the price is the differentiating element. In that way, Chile is much more developed [than Argentina]; on average, each resident travels by plane more than once a year, and that trend will continue to grow. In Argentina that will take longer. It would be faster if they eliminated the minimum amount.”
“The Argentine market could double in a year, but because of its regulations it’s likely that it will take longer, maybe two or three years,” he added. That seems to be the consensus among airline authorities, eager to get into the Argentine market. Until the government does its part, they say, they won’t be able to fully offer their product.