The Government authorized a rise of domestic flights prices
Argentina, February 11, 2012
From now on, the prices of domestic flight will increase. The increase is about 40% on average and was authorized by the National Government.
The decision mainly benefits Aerolineas Argentinas, in state hands, which has more than 60% of the commercial aviation market. The remaining 29% is held by LAN, while Andes and Sun share the remaining 1%.
The news were communicated through the Official Gazette in resolution 23/2012. So far, the rise of Jet A1 fuel was 18%.
The main argument for a rise in rates is that the local fuel production is sold at international values, as was stated by the Secretary of Transportation, Juan Pablo Schiavi.
And he added that “this is the consequence of the high concentration of aviation fuel market in the country for which there are only three vendors, configuring a situation of abuse of dominance, which has resulted in arbitrary allocation of the prices”.
The accused oil companies are YPF, Shell and Esso. Meanwhile, YPF and Esso said the jet fuel went up, but not as much as the Government says and added that the price of Argentina is one of the lowest in the region.
To give some examples: the flight from Buenos Aires to Comodoro Rivadavia costs up to $ 1288, when so far it was $ 704. This is an increase of 83%. Another destination that will rise is El Calafate. The passage over there will have a maximum value of $ 1288, marking a rise of almost 70%. Other destinations range between 40% and 66%.
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