All Eyes on Argentina (Hopefully to See Something Good)

It’s not often that a highly-protectionist regime disappears leaving vast opportunities for air travel growth, but that’s what we’re seeing in Argentina right now. That’s good news is many ways, but it’s also going to cause a whole bunch of headaches from a logistical perspective. Get ready for a flood of new service. I hope this goes well.

Until it ended in 2015, Argentina spent more than a decade under the Kirchner regime. First it was Néstor Kirchner for four years followed by his wife Cristina Fernández de Kirchner for eight. They were populists, and they viewed Aerolineas Argentinas as THE domestic airline, an arm of the government. Aerolineas Argentinas had an aging fleet and was shockingly inefficient yet it had near dominance over the country’s domestic market. While LATAM was able to mount some semblance of a competitive effort, it wasn’t without having to overcome all kinds of massive stumbling blocks. Those shenanigans even earned the entire country a Cranky Jackass Award.

In 2015, Mauricio Macri was elected, and he came in with a focus on fixing the broken economy. That meant he opted for a more globalist approach, and he wanted to open up previously-closed markets. Air travel was expected to be one of the big beneficiaries, though Aerolineas Argentinas itself would likely be one of the biggest losers. Having enjoyed a near-monopoly for so long, Aerolineas Argentinas never had to worry about being inefficient or… good. That’s now going to change, because Macri wants to encourage new entrants and foreign investment. He’s hoping to double domestic air traffic in the next few years. That enthusiasm is bringing some very interesting players into the country beyond LATAM. Most notably…

  • Flybondi is a low cost carrier that says it hopes to have 4 aircraft operating by the end of the year. It has big plans with 28 airplanes and dozens of destinations operating by 2021.
  • Avianca Argentina is only tangentially-related to Avianca itself and is based on the ashes of Macair Jet. The airline plans to fly ATR turboprops on secondary routes.
  • Norwegian, yes, Norwegian has no place to put all of its airplanes in the winter. So… Argentina! It sounds insane, and it is. But the airline is moving ahead with a plan to run a domestic operation from bases in Buenos Aires and Cordoba as well as long haul over to Europe from Buenos Aires.

There are others too, but until we actually see some money and some airplanes, it’s hard to know who will actually get this off the ground in a sustainable way.
Now here’s the thing. With the exception of piddly little Avianca Argentina (for now), everyone is gunning for Buenos Aires. It’s the capital, the economic center, and its metro area has about 30 percent of the entire country’s population. And Buenos Aires is a mess when it comes to airport infrastructure.

There are two main airports serving the city. Here’s a map:

The main international airport is Ezeiza, southwest of town. It’s where all long-haul flying happens along with most shorter-haul international flying. But it still plays second fiddle to Aeroparque which sits right on the water and is close to the city center. Aeroparque is hemmed in by the city and is pretty much built out. It used to be domestic-only but in recent years it has opened up to regional international destinations. This is going to change, however, because well, they need more room.

In the next couple of years, the government is going to force all international flying away from Aeroparque with the exception of Uruguay flights. (Uruguay is so close they kind of consider it domestic-ish.) This is meant to free up space for new entrants to come in and wreak havoc.

For those math whizzes who counted to three when looking for airports on the map and not two, good work. That third one is El Palomar. The old military base is opening up to commercial traffic. And Flybondi is very interested. In fact, it’s going to build its own terminal there if it gets its way.

The split domestic/international airport is terrible for people who live in Argentina but outside Buenos Aires. It means that connecting options are much more scarce to the outside world than they otherwise would be. But there could be much greater utility if low cost carriers come in and bring lower fares to domestic routes.

But oh, about that. Apparently there is still price regulation domestically in Argentina. If this article is correct, the maximum price threshold has been removed, but there’s still a minimum. That’s going to put a huge damper on those low cost carrier dreams. With the current government’s views, I won’t be surprised if that changes. Heck, something is probably already under discussion. But that could be the end of Aerolineas Argentinas if they aren’t careful. (Maybe an Argentinian reader can give us a status update.)

There is pent-up demand in Argentina, but there’s a lot of regulatory baggage that has prevented it from being realized. With a new government, the engine is there to finally provide Argentina with a half-decent air transport system. But the infrastructure is going to have to catch up. Let’s hope that happens before the passengers start arriving in droves.

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17 Comments on "All Eyes on Argentina (Hopefully to See Something Good)"

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Kilroy
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Think of Aeroparque Newbery as Buenos Aires’ version of LGA, with the additional fact that Newbery is close to some fairly nice neighborhoods. Ezeiza is Buenos Aires’ JFK, in that it has most internationally flights, is very far out from the city center, and is a pain to get to and from. The tourist/coast parts of Uruguay can be considered Eastern Long Island / Newport RI / etc. Uruguay has its own economy, but is still heavily influenced by money and visitors from Buenos Aires. There are regular ferries (high speed and normal speed) from Buenos Aires to Uruguay, so… Read more »
Bill Hough
Guest

A better analogy is DCA/IAD. Analogy also works better since both BA and DC and the respective capitals.

Kilroy
Guest

Buenos Aires is also the largest city in Argentina, though, by far.

Fair point, though, and I mostly agree with you. In terms of a small and convenient airport being located near the city center and near a lot of wealthy NIMBYs who would prefer not to be on the flight paths, vs a much larger airport located farther away, the DCA/IAD analogy is probably a better one.

southbay flier
Guest
Argentina is a beautiful country and is worth visiting IMO. Patagonia in the south which is beautiful. Buenos Aires is a very cosmopolitan city with great food, especially beef. Iguazu Falls is very impressive. That’s what I saw in a 2 week vacation. There is Tierra del Fuego, Mendoza wine country, and some other great sights. When I went in 2014, the currency exchange rate was regulated. You got more for your dollar exchanging on the black market. That was an experience. I agree with your LGA/JFK analogy. AEP has only a one short runway and it felt like the… Read more »
Andy
Guest

And this is why I read your blog! Very interesting – Thanks Cranky!

Pedro
Member

Brings back memories, rode on a Southern Winds 737-200 from Aeroparque to Iguazu Falls and back several years ago after taking a Delta flight to EZE from Atlanta. Think Southern Winds has since gone away, was an enjoyable 2 hour flight, good service and friendly crew.

Kilroy
Guest

I took the bus roundtrip to Iguazu Falls, twice, and even talked my 50-year-old mother into going along with me the second time. Good times- hot food, angled lie-flat seats, and even wine and liquor one on bus line. Not a ton to do at Iguazu Falls, but well worth hitting it during a full moon if they are still offering the special full moon night time tours. Great trip for a long weekend from Buenos Aires.

southbay flier
Guest
I was in Argentina in 2014 and I can say that AR is the worst airline I’ve ever flown. I flew AEP – FTE and AEP – IGR as two separate round trips since I didn’t trust being able to connect on that airline. Boarding was more chaotic than in the USA. The baggage fees I had to pay for being overweight were random. It was 0 both times leaving AEP, $6 at FTE, and $25 at IGR. The cabin service was even ruder than the worst service I’ve ever seen in the USA. I was really happy to be… Read more »
Kilroy
Guest
Don’t even get me started on the Argentine government. You could smuggle a herd of llamas past the sleeping Customs agents in EZE and I doubt anyone would care, especially if you were white (huge discrimination against Indian-looking people and those from Bolivia, Peru, and Paraguay in Argentina), yet Customs & Immigration harasses car drivers and bus travelers on buses that are 30+ miles from the border. In my limited experience, if you want reasonably effective law enforcement (read: tough to bribe) and thorough Customs / Immigration agents south of the Rio Grande, Chile is your best bet. On another… Read more »
Oliver
Guest

How is this Norwegian thing going to work? Are they going to hire local crews to work their flights for the months that they operate the network (if it is seasonal), or are they relocating existing crews temporarily?

dan tana
Guest

this thread has some drift…AR is like AZ alitalia…highly unionized, inneficient, older planes, American has the LIONS share in the argentina-usa market…I have seen up to 5 AA 777’s at one time in EZE. I flew braniff DC-8-62 to eze and years latter Eastern DC-10’s. also flew on austral BAC-1-11 when it competed against AR….I think flybondi will kick a$$ if they do what they plan…new private terminal at el palomar. the only hope for AR is once it goes chapter 11 for avianca, copa or latam to buy it

Denis
Guest
It’s a long post, but I would like to share my personal experience with AR in details, since it’s vastly different from the perception most people have. Before coming to Argentina basically everyone was telling me how awful AR was and that I should expect nightmare flying with them. Apparently my experience was very positive. I had a 2 weeks long trip to Argentina in November 2016 which included quite intensive travels around the country. I didn’t take a bus once (it’s very common means of transport in the country), almost all my travels were covered by AR and once… Read more »
kokomo
Guest

Hi. Regarding the minimum price threshold you are mentioning I want to add the following. The origin of this measure was to protect long distance coach companies share of business. However, in an economy with high inflation you do not need to remove this limitation but just not update it at all. In a couple fo months prices in local currency will have made it obsolete at all. My bet this is what the government will do and what low-cost airlines expect

Enz
Guest

Fly Bondi looks to be the one that will make all this come true before the end of the year. Also Sky airline is already doing some low cost flights between Chile and come Argentine cities. Looking good Aerolineas Argentinas will have to adapt maybe not go on strike so often. People have had it with being hostages of an airline and their attitude.

Pepe
Guest

I didn’t like Ms Kirchner at all, but what you refer to as a regime, was elected twice by the vote of the people so…not good writing

davidp627
Member

I’m half Argentinian and will be flying to Buenos Aires next year for a wedding. I have relatives who work for Aerolinas Argentina – for many years highly bureaucratic and inefficient, they tell me. I will probably end up flying on AA through MIA. Agree on BA and the rest of the country. BA is very cosmopolitan – it’s a cliche, but it’s like the Paris of South America.

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