Argentina will remove a minimum fare rule from 15 August, paving the way for low-cost carriers to price their fares freely.

Argentina’s first low-cost carrier Flybondi has been a driving force behind the change, as it routinely lobbied against minimum prices.

"I would like to sell tickets for Ps200 pesos ($7), but until now the law forced me to sell them for no less than Ps500 ($17) [on short routes]," says Flybondi CEO Julian Cook, welcoming the domestic fare liberalisation.

Norwegian Air Argentina, which has not announced the date of its first flight, also welcomes the change.

"This is excellent news for everyone, as it will contribute decisively to the development of Argentina’s aviation market, particularly contributing to the development of the country’s interior," the airline's chief executive Ole Christian Melhus says.

The minimum fare rule was originally imposed to protect long-haul bus operators from airlines undercutting their fares. However, high inflation rates combined with the lack of changes to the minimum fares for four years, have rendered the minimum fare rule irrelevant.

Opening up Argentina’s skies has been a top priority for the liberal Macri administration, which came into power in late-2015. The domestic Argentinean aviation market has evolved in little more than two years from thoroughly protecting flag carrier Aerolineas Argentinas against local competitors to a now completely free market.

Despite its large area, Argentina has traditionally been one of the countries with the lowest penetration of air transportation among its inhabitants, compared with other more open Latin American countries.

Source: Cirium Dashboard