Between December 2020 and May 2021, the average cost of airline tickets in Costa Rica increased 18%, a variation that is explained by the increase in fuel prices and the depreciation of the local currency.
One of the sectors with the highest contribution to the variation of the Consumer Price Index (CPI) in May was Transportation. According to the National Institute of Statistics and Census (INEC), gasoline, airline tickets and tourist packages abroad were among the main items with the greatest positive effect on the price level.
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.
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 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.
The arrival of so called "low cost" airlines to the region has resulted in a progressive reduction in the prices of tickets to fly between Central American countries. Between 2011 and 2014 the average cost without taxes for travelling between Costa Rica and El Salvador ranged from between $400 and $500, while in 2015 it costs $391.
Owners of VivaColombia and the mexican VivaAerobus have announced the opening of a holding company in Panama to start operations in Central and South America.
From a statement issued by Irelandia Aviation and Grupo IAMSA:
Irelandia Aviation and Grupo IAMSA, owners of the Mexican low-cost airline VivaAerobus and of the Colombian airline, VivaColombia, announced their intention to expand the Viva airline brand in Central and South America.
Air fares rose from $1,100 to $2,500, threatening to cause a dramatic drop in the flow of tourists from Venezuela to Panama.
Speculation and distortions in the foreign exchange market have caused Venezuelan air tickets to become the subject of hoarding "resulting in there being to date no seats available to Panama for the remainder of the year."
Travel agents say that people are not buying the tickets for sightseeing, but in order to obtain dollars and that this is causing prices to soar.
There has been a favourable response to the bill establishing an open skies policy based on reciprocity with states and airlines.
From a press release by the Legislative Assembly of El Salvador:
The Commission of Public Works, Transport and Housing of the Legislative Assembly, reached a favourable ruling regarding the reform to the Civil Aviation Act, to establish in the country a "Open Skies Policy" and create greater competitiveness in the airlines market with fares which are more accessible to users.
The Superintendency of Competition could set minimum and maximum transient prices for air tickets, in the national interest or because of public need.
The initiative a proposal by the Frente Farabundo Martí para la Liberación Nacional (FMLN) to the Salvadoran Congress to amendment Article 22 of the Civil Aviation Act so that the Superintendency of Competition (SC) can set those rates.