Airlines eye new opportunities in Argentine skies

International airlines and airplane manufacturers are taking steps to increase their presence in Argentina, as a new business-friendly government heralds change for the market, executives said at the FIDAE air show in neighbouring Chile. The domestic Argentine air travel market has been dominated in recent years by two carriers - state-run Aerolineas Argentinas and Chile-based LATAM Airlines, Latin America's biggest airline.
The former leftist government stymied competition and ran Aerolineas as a political project rather than a business, industry insiders said. But with the arrival in December of Argentina's avowedly pro-business President Mauricio Macri, that is beginning to change.
"Until recently what they wanted was a monopoly, without caring if it was good or bad for the consumer. Today what they are looking for is competition and to be more efficient," LATAM Airlines Chief Executive Enrique Cueto said at a FIDAE panel. That could spark a revived interest in tourism to and from Argentina, with foreign visitors benefiting from a recent devaluation of the country's peso currency.
The country's airline market already has a new entrant. This month Avianca Holdings, a key player in South and Central America, announced that it had bought small Argentine executive flight and charter company MacAir Jet - owned by none other than Macri's family. "The market is opening in Argentina, with a different mentality, until now it never interested us," German Efromovich, president of Avianca Holdings, told Reuters.
"We will start with six 70-seat turboprops and expand to eighteen, that is the plan," he said. The idea is to fly to under-served niche destinations, he added. Executives from planemakers Boeing, Airbus and Finmeccanica also said the change in government afforded the sector more opportunities, while one FIDAE exhibitor said companies from his country had been advised by government officials to scout out deals in Argentina. Aerolineas Argentina said it did not send representatives to FIDAE and did not respond to requests for comment.