December 21, 2017 / 4:52 PM / 2 years ago

Argentina low-cost airlines eye regional routes next year

BUENOS AIRES, Dec 21 (Reuters) - Argentina-based low-cost airlines will begin international flights to Latin American capitals next year as part of their investment plans following the opening of the country’s once-restricted skies, executives from three companies told Reuters.

Avianca Argentina, the local unit of Avianca Holdings SA , Flybondi and Andes have all won new domestic routes due to market-friendly President Mauricio Macri’s efforts to boost competition in the sector, dominated by state-owned Aerolineas Argentinas and Chile’s LATAM Airlines Group SA .

Now they plan to introduce flights to countries including Brazil, Chile, Paraguay, Peru, and Uruguay beginning next year, betting that falling prices and more routes will encourage more Argentines - who fly half as much as Brazilians and four times less than Chileans - to travel more by air.

“We are almost 100 percent more expensive (than regional peers) due to a total absence of supply,” Hugo Diaz, commercial director at Avianca Argentina, told Reuters in the company’s hangar at Buenos Aires’ Aeroparque airport.

The company, which expects to invest more than $300 million in Argentina, began flights to the coastal city of Mar del Plata in November and will launch 14-18 new routes in 2018, including Lima, Santiago and Sao Paulo.

Flybondi, which has invested $75 million and received approval to operate in Argentina in June, expects to double its fleet of five planes and add flights to Santiago, Asuncion and Montevideo, Chief Executive Julian Cook said at the company’s Buenos Aires offices.

“Argentina was not ready for this growth, but we are seeing willingness from the government to rapidly provide the structure necessary to accelerate the private sector’s expansion,” said Bernardo Racedo Aragón, commercial manager for Andes, an Argentine-owned company that plans to add flights to Asuncion and Montevideo next year.

That growth has required substantial improvement in airport infrastructure. Aeropuertos Argentinas 2000, which is controlled by Argentine billionaire Eduardo Eurnekian and has the concession to operate 33 percent of the country’s airports, has invested 4.8 billion pesos ($270.42 million) in the past two years, spokeswoman Carolina Barros said.

“We have a master plan that we adjust according to the Transport Ministry’s policy,” Barros said.

$1 = 17.7500 Argentine pesos Reporting by Eliana Raszewski; Writing by Luc Cohen; Editing by Bernadette Baum

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