After the press conference held this Thursday at the Jorge Newbery Airport in Buenos Aires in which the return of regular flights was announced, Agustina Rota, Aviacionline correspondant in the Argentine capital, had the opportunity to ask Mario Meoni, Ministry of Transport about one of the most sensitive issues in the airline business: the reestablishment of the minimum price on air fares.
Meoni replied that “in this context of a pandemic and few operations we are not making progress on the subject. We have discussed it with the CEP of Aerolineas Argentinas, Pablo Ceriani, but we are not ready right now to move forward”.
The Minister assured that nowadays “the first concern is to be able to have flights again and perhaps then we can have a minimum price. But we are not yet in a position to establish it in this context of crisis in the sector.
Asked if it could happen in 2021, the Meoni said that “if flights returns to normal, perhaps we will establish a minimum price.”
The deregulation of domestic fares in Argentina was one of the flagships of the Mauricio Macri administration, and came along with the arrival of low-cost carriers, a model for which it is essential to be able to move their rates without major restrictions given their aggressive commercial policy (or predatory, depending on how you look at it).
With certain variations, the current reference fares system had been “inherited” from decree 1654/2002 that established the emergency law for commercial air transport. Through Resolution 656/2018 published on July 31, 2018, airlines were authorized to sell tickets below the minimum price.
After the severe devaluation in mid-2018 and its impact on the economy, this measure was essential to continue boosting the growth of passenger traffic, attracted by fares that reached historic levels of less than a dollar.
But it also received strong criticism from more orthodox sectors, who warned about the possible effects of dumping on the overall local airline system.
