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Argentina stresses growth potential despite 'transitory' weakness

Argentina's transport minister Guillermo Dietrich believes that ongoing weakness in international travel demand from Argentina is "transitory", as he reiterates the South American country's commitment in liberalising the aviation sector.

"We might not have international passenger traffic growing at the same rate as before," Dietrich tells FlightGlobal at the ALTA Airline Leaders Forum in Panama City. "But in a market that has grown dramatically, we are sure this is transitory."

Dietrich has overseen a transformative change in regulation of the aviation sector in Argentina, since President Mauricio Macri came into office in late 2015. The country has welcomed foreign companies to launch new domestic carriers, and approved long-delayed requests from foreign carriers for new international routes.

The country's domestic route network has grown by almost 50% and the international route network by 70%, says Dietrich.

But devaluation of the Argentine peso and an economic recession has impacted outbound international travel from the country, contributing to an already challenging macroeconomic situation for Latin America's airlines.

Argentina though still sees plenty of demand from airlines to begin new routes, say Dietrich and the chief of Argentina's civil aviation agency ANAC, Tomas Insausti. The latter notes that ANAC recently held a public hearing in which airlines requested approvals for hundreds of new routes.

Chile-based JetSmart will launch service to Argentina in December and is planning a local affiliate to begin domestic flights as soon as mid-2019. American Airlines is also adding new Argentina routes later this year, Dietrich points out.

Domestic passenger traffic in Argentina has grown 13% this year as of September, and international traffic was up 5%.

Argentina continues to progress in improving the aviation sector, including a $1 billion investment in airport infrastructure and a goal of reducing bureaucracy and growing competitiveness, says Dietrich. For example, airlines will now be able to arrange their ground-handling service instead of using a state-owned provider which previously held a monopoly.

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