The “open skies” policy that Javier Milei’s government seeks to establish (in December he dedicated an entire chapter to him, the ninth, of DNU 70) is for the moment an expression of will. No airline, domestic or foreign, has so far taken steps to become a new operator of the domestic market, where aircraft with national registration LV fly.
The only scheduled flight operators within the country continue to be the State Argentine airlineswith just over 60% of the market, followed by “low cost” Flybondi and Jet Smart, both controlled by US investment funds.
However, in the last few days there has been a discreet and much more related movement classic market competitionwhich is the underlying idea today more marketing expression of open skies.
This is JetSmart Argentina’s entry into the the route that connects Buenos Aires airport with Carrasco airport, in Montevideo.
Since 2012, when Pluna stopped flying, that route had only been supported by Aerolíneas Argentinas, which Today it flies four times a day.
This is not a forced monopoly: simply, the competition disappeared more than ten years ago on the “air bridge” with the capital of Uruguay. The other alternatives are airlines that operate connecting flights (LATAM, Gol, Sky, Paranair) or take the Buquebus.
In this context, at the beginning of last month, an Aerolíneas Argentina ticket from Aeroparque to the capital of Uruguay for May 29 was mentioned It cost 237,000 pesos, round trip.
On March 18th JetSmart announced its new route to Montevideo, with two frequencies per day and flights starting exactly on May 29th. The initial fee is much lower: 70,000 pesos, round trip.
The next day, Airlines have lowered fares. The ticket for May 29th it went from 237,000 to 186,000 pesos. 27% less. If the search is extended to further dates, for example until the end of July (full winter holidays), rates are available for 140,000 pesos. In the case of JetSmart you can purchase a late July weekend today less than 35,000 pesos.
Although “low cost” flights apply a fee that increases as baggage, some seats or services on board are added, the truth is that in this case it is a 55 minute flight, with little margin to apply costs additional to passengers.
The airlines admitted the fare reduction It was a response to his competitor’s entry.
“When an airline enters competition on a route, it is normal for it to start its operation with an aggressive pricing policy. And the market responds in the same terms“explained Aerolíneas spokespersons. “Montevideo in particular is a corporate destination with many last minute purchases. “Pre-sale promotions are usually not very successful.”
Strictly speaking, the route to the capital of Uruguay is one of many on which Aerolíneas flies without other competitors. Indeed, the airline has made “connectivity” one of its main themes as a company since its renationalisation in July 2008.
But “connectivity” does not imply that rate be given. Another case is that of White Bay, a route that only Aerolíneas flies since the former LATAM Argentina stopped doing so in 2018, even before its closure. A flight to Bahia in June, still low season, listed at 124,000 pesos. For the same date, a much more distant destination such as Comodoro Rivadavia, where in addition to Aerolíneas Flybondi also flies, is listed on the state airline at 75,000 pesos. Just over half.
Source: Clarin
