Line Argentina is Opening Their Skies

Announcement Regarding Air Travel in Argentina

From time to time, I check on the level of borrowing among the tourism- focused countries just to see how much of their GDP is committed to interest payments due to organizations such as the IMF. You may wonder why I’ve chosen to allocate time for this among all the things I could be doing in a day. Don’t worry; many of you have asked me the same thing. First, would be to see how economic initiatives and tourism revenue can help repay this mounting debt, some of which are still lingering effects of the pandemic. The second reason is a bit more selfish, so I can call out these agencies for their predatory lending practices on our podcast, The Sustainable Voice®.

You can imagine, then, how big a deal the news from Argentina is for me. Argentina, the largest borrower to the IMF, with over $30 billion in outstanding loans, which equals around 5% of their GDP, announced on July 10 that they are expanding the initiative to open their skies to foreign carriers to operate unlimited routes and frequencies in Argentina. To this point, the state-run airline Aerolineas Argentinas holds the largest market share, making it essentially the only game in town. Anyone who has been to Argentina can see the magic, however, the one glaring weakness is the infrequency of flights to the more remote parts of Argentina.

This new announcement will add more choices and better fares for visitors to Argentina and is a path to economic growth. The largest part of this deregulation is that airline prices are now set by the open market as they are here in the US and in many other countries. The government will no longer set a price floor, and the increased competition should lead to better levels of service and more flexibility in fares. Open skies agreements were signed last week with regional partners; however, this broadens the reach and has the potential to change the landscape of how Argentina is connected to other countries in Latin America.

Now, I do understand that local unions are not necessarily delighted with the news. To them, I saw this. Tourism and the new ways Argentina would be included in custom itineraries featuring new destinations still represent the best way to repay the mounting debt to the IMF. Tourism revenue reached just over $8 billion in 2023 and is slated to grow by 10% a year. The importance of sustainable tourism, finding a balance, and avoiding over-tourism is crucial in this matter. This new deregulation has the potential to create access to more remote sections of the country, engaging the local culture where tourism doesn’t normally reach. It is the best path forward.

Stay tuned for new products as more routes and as this agreement comes to fruition.