Argentina To Adopt Full Open Skies Aviation Policy

In 2023, Argentina elected Javier Milei as president, an ultra-libertarian who is trying to take state involvement out of as many industries as possible. In late 2023, Milei announced plans to start allowing foreign airlines to compete on domestic routes within Argentina. This is now one step closer to becoming a reality…

Argentina to fully open up to foreign airlines

Each country has its own aviation policy, which dictates what kind of flights airlines can operate, to, from, and within, that country. When it comes to international flights between countries, some governments have Open Skies policies (where unlimited service between select countries is permitted, subject to certain requirements), while other governments have bilateral agreements (where the number of frequencies between countries is specifically negotiated, and could come with lots of stipulations).

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It’s incredibly rare to see a country allow foreign airlines to provide domestic service within a particular country, especially with pick-up and drop-off rights. However, Argentina could be among the first to allow that. On September 23, 2024, Argentina’s government signed Decree No. 844/2024, which essentially deregulates domestic flights in Argentina, and allows flights to be operated by foreign airlines. The new decree will come into force 60 days after it was issued.

Essentially lifting all restrictions on international airlines is a major move that’s more or less unprecedented. For example, the United States participates in an Open Skies treaty, whereby airlines from other countries participating in the treaty can offer unlimited service to the United States. However, we still maintain bilateral treaties with countries that aren’t part of that agreement, and don’t allow foreign airlines to operate domestic flights (at least not that they can sell tickets on point-to-point).

This development comes as Milei is trying to privatize national carrier Aerolineas Argentinas, but is facing significant challenges with accomplishing this, especially with labor groups.

My take on Argentina opening up its skies

While I certainly have my concerns about Milei, I don’t necessarily think a country like Argentina adopting a full Open Skies policy is the dumbest idea ever. A few thoughts, both positive and negative:

• More air service to a country is generally good for the economy, and lifting the red tape on new service is ultimately a positive
• Historically the South American mega carriers (like Avianca and LATAM) needed to set up subsidiaries in each country where they wanted to have significant operations, so there’s something to be said for the simplicity of being able to add service without needing to deal with that bureaucracy
• I can’t imagine we’ll see that many other airlines suddenly serving domestic routes in Argentina — I don’t think Qatar Airways will be tempted by the prospect of hourly service from Buenos Aires to Cordoba, but I could be wrong 😉
• There’s also the issue of airlines being able to get money out of Argentina for operating domestic flights, especially given that the currency hasn’t exactly proven stable over time
• There’s not some amazing labor arbitrage opportunity here, like we’d see if foreign airlines were allowed to operate domestically in the United States

So we’ll see how this plays out, but given the state of Argentina’s economy, I don’t think this is the wildest idea ever. For example, LATAM Argentina ceased operations in 2020, so maybe an Open Skies policy to this extent would cause LATAM to once again add more service from Argentina… who knows. It’s definitely not good news for existing players, though.

Bottom line

Argentina’s president is putting plans to liberalize aviation restrictions into action. Thanks to a new law, it will soon be possible to foreign airlines to operate domestic flights within Argentina. There aren’t many countries with such open policies, so I’m curious to see how this plays out.

What do you make of Argentina’s Open Skies policy?