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).
The Panamanian airline has presented a financial offer in cash and stock to acquire the second largest airline in the region after Latam Airlines.
The New York Times reported that the offer made by Copa Airlines consists of "... a merger that would value Avianca at more than $2 billion, or a 150 percent premium to its share price last week. [November 29]".
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.
With the entry of two competitors focusing on the business of low-cost fares, the airline market in Central America is preparing for a potential price war.
Panama has become the starting point for tourists looking to travel to the rest of Central America, where new airlines want to capitalize on a market which so far has been driven Copa Airlines and Avianca.
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.
United Airlines, American Airlines and Air Canada have also suspended the sale of tickets for international flights to Venezuela.
The international airlines American Airlines, United Airlines and Copa Airlines have decided to temporarily cancel the sale of air tickets in Venezuela. The measure was taken due to the uncertainty generated over a multi million-dollar debt the government holds with some airlines and the changes that have been made relating to foreign exchange.
American Airlines has withdrawn its supply to Despegar.com accusing the company of using a wholesale pricing policy which is unfair and inaccurate.
The airline has withdrawn sale of its flights by Despegar.com and from websites developed by Despegar.com, including all sites worldwide such as Decolar.com.
Now customers can purchase airline tickets at aa.com at no additional charge.
The airline TACA will provide Central American passenger with some 26,000 seats at a lower price in order to promote tourism in the region.
The promotional packages include tickets, transportation, lodging, meals and tours for all countries on the isthmus, said Juan Carlos Ramos, president of the National Chamber of Tourism (Canatur) in Costa Rica.
At the moment detailed information is not available, but discounts will range up to 40% of the original value. Information will be available from Friday 20th April 2021 on the site www.descubrecentroamerica.com, reported Elfinancierocr.com.