Argentina Aviation Part 2: Aerolineas Argentinas pressured as competition intensifies
Argentina’s domestic market is poised for more rapid domestic growth driven by further expansion at Aerolineas Argentinas and intensifying competition. Aerolineas has focused primarily on domestic expansion since its renationalisation in 2008 and continues to grow its domestic fleet.
Argentina’s domestic market grew by approximately 60% from 2011 to 2015, driven entirely from expansion at the Aerolineas Argentinas Group. Competition during this period was limited by the restrictive and protectionist policies of the previous government, enabling Aerolineas to increase its market share without having to fend off expansion from its local rival LATAM Argentina, or potential start-ups.
Under the more liberal policies of Argentina’s new government, LATAM Argentina is now free to expand. New airlines are also able to launch, starting with a regional start-up backed by Avianca parent Synergy and a potential new affiliate of the Latin American LCC group Viva. Aerolineas is responding to the prospect of new competition by pursuing more domestic expansion.
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