Little Competition in the Region's Air Market

Charges, taxes, high fuel prices and other costs at airport terminals can represent close to 30% of the value of air tickets in countries in the region.

Wednesday, September 26, 2018

Airlines that operate in the Latin American region face an uncompetitive market, since in 2018 these companies are projected to earn $2.95 per passenger, a figure much lower than the $15.67 estimated in North America or $7.58 in Europe, according to representatives of the International Air Transport Association (IATA).

In relation to the specific costs in Costa Rica, reports that in the country there is " ... an even higher cost for fuels, compared to the region. This item can represent another 10% of the final value of the ticket."

Peter Cerdá, vice president for the Americas of IATA, said that " ...In this aspect the Costa Rican situation is complicated for air transport companies, as there is no competition in the supply of fuels, in reference to the monopoly held by the Costa Rican Petroleum Refinery (Recope)."

Regarding figures on the Central American domestic market, the IATA details that 560 flights are currently offered per year, with 141 routes and 21,000 available seats. From the region to other areas of the world, 273 flights are offered, with 135 routes and 39,000 seats available each year.

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Welcome Competition and Low Prices

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In five years the airline market in Central America has transformed from being a market dominated by two major airlines, to one with new entrants, lower prices and greater connectivity.

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