CORRECTED - Argentina authorizes industrywide air fare hike

(Removes word "cargo" in last paragraph.)

BUENOS AIRES Nov 17 (Reuters) - Argentina's government authorized an industrywide increase in domestic air fares on Tuesday, answering calls by local airlines that prices were outdated and creating market distortions.

The measure seeks to "guarantee appropriate air traffic public service" and "protect the local air market," according to a statement by the government's transport authority agency.

The air-fare increase impacts mainly coach-class tickets and may vary within a price band determined by the government.

With the increase, a round-trip ticket from Buenos Aires to the southern city of San Carlos de Bariloche, a popular tourist destination, now may cost from 748 pesos ($196) to up to 1428 pesos ($375).

Argentina's airline market is controlled by Aerolineas Argentinas, a state company that has been posting million of dollars in losses.

The measure will also impact Austral, which is controlled by Aerolineas Argentinas and Lan Argentina, the local unit of Chilean LAN LAN.SN(LFL.N).

(Reporting by Nicolas Misculin; Translating by Vivianne Rodrigues; editing by Gunna Dickson)