Opening Airspace: Still Far Off In Latin America

Apr 30 2014, 7:10pm CDT | by

Opening airspace borders in Latin America would increase commercial flights and reduce fares, analysts say.

Airfares to travel in the region varies depending on the countries you visit. Some countries like Mexico or Venezuela have fewer local flights while others, like Chile or Brazil, offer more options to travelers. Fares tend to respond to supply and demand dynamics, so countries with more flights usually have cheaper tickets.

In Europe, members of the European Union opened airspace borders among themselves. Here in Latin America, the approach to airspace has varied over the years with some countries restricting air travel, just as others implement a more open sky policy.

“Having an open sky policy in all of Latin America is a pending issue,” says Ricardo Delpiano, an air transport analyst based in Santiago. Some countries’ reluctance to open their airspace borders has more to do with political ideology than economics. “There’s a certain political resistance in part of the region where opening borders is seen as something negative,” says Delpiano.

Venezuela and Argentina have some of the biggest restrictions on air travel. Both countries have a protectionist approach, as opposed to Chile, which has an open sky policy. Other countries such as Peru and Colombia are gradually moving towards opening their borders with bilateral agreements in the line of Brazil. Under former President Lula Da Silva, Brazil signed agreements to open skies with the U.S.

Benefits of an open policy also come in the form of new routes. “If we had open skies, carriers would be able to open new routes in addition to increase flights on their existing routes,” said Delpiano.

With a policy similar to Europe’s still far off, airlines have managed to adapt to restrictions through mergers and acquisitions. Panama’s Copa Airlines was able to operate in a new country –Colombia– through the 2006 acquisition of local carrier Aerorepublica, which was later rebranded to Copa Airlines Colombia.

More recently, Chilean LAN Airlines increased flights to Brazil after the 2012 merger with Brazilian carrier TAM. Latam Airlines Group, born from the merger, has been promoting its new routes to cities such as Belem, Natal or Recife from Santiago. Passengers, meanwhile, are enjoying lower fares.

 
 

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