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Today I want to leave you an invitation to dream in cheapest flights between brother countries that we share a lot, but that the costs divide us.
We are talking about the costs of air tickets within our Latin American region, It's no secret that the tax burden of the region reduces the demand that could be even higher than it already is, it is even generating new connections and growth opportunities.
Aviation is a means of transport that more than be very safe, It is highly vulnerable to external factors, as we saw with the pandemic and more recently to the now higher prices of fuels, thanks to the price international oil.
These factors directly influence demand., since having higher operating costs, these are transferred to users directly affecting the occupation of flights, where fewer people fly and when demand falls, prices rise again. Law of supply and demand.
Why do I want to invite you to dream?
Our Latin American region is one of the regions in the world with the least aeronautical development (with few exceptions like Brazil for instance), but in general we are light years away from what is lived in regions like Europe, where flying is very accessible and the competition is enormous.
Social network users constantly show their disagreement about the high prices of tickets within the region and beyond that on some occasions they are right, they also forget basic rules for buying tickets such as anticipation, day and season of travel, but that's another topic we have talked here.
It is usually compared, although very unfair, what the tickets cost in Europe or the United States (domestic flights), but for these regions to have these absurdly low passages is due to a combination of:
- Public politics + offer + demand – low tax burden = low priced tickets.
So what could we do in Latin America or at least in some more focused regions like South America or even between countries of the Andean Community? I invite you to dream that international flights between these countries are considered as domestic.
Yes, you read it right. Let us dream that international flights in our region will be considered for the concept of Taxes and fees as domestic, which would mean a significant reduction in the prices that users pay, skyrocketing increase in demand and true regional integration.
Example
It is best to reduce this idea to a practical example so that you can see how incredible it would be to have international flights considered domestic, as is being done with cross-border flights between Peru, Colombia and Ecuador, but scaled up:
- Current price Quito – Bogota – Quito (no baggage): $200 with fees and taxes
- New price if considered as domestic (no baggage): $99 with fees and taxes
The value 2 it is an estimate and could vary depending on the calculation of VAT or other local surcharges, but it allows us to see a very attractive price that would undoubtedly increase demand to unprecedented levels on this route and on others in the region where this dream is applied.
It should be noted that in some countries the effect would be different since their tax burdens are lower compared to the case of Ecuador and Columbia, where for example just lowering the EcoDelta from Ecuador, would show a reduction of $50 per ticket.
Would airports earn less?
No, since this would apply to be an economy of scale, which means that although for passengers on international flights they would collect less, in volume it would increase as there are many more users flying, more planes on their platforms and new airlines operating.
What do you think of this idea? I read them in the comments…
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It has always been the dream of many airlines, but high local taxes make that impossible, if it is missing, it should be a policy of the governments themselves, even for local flights the cost of taxes is absurd.
Agree, although the topic on local flights does change a lot from country to country. For example, Colombia has one of the lowest of all.
okay 100 x 100. prices between bordering cities, they are tremendously tall
Imagine everything as a domestic flight, It would be incredible.
I totally agree with you Nicholas..
Unfortunately, tax burdens are very high for international flights with the exception of Brazil and Chile and these are precisely the ones that grow the most in number of international passengers..
Colombia grows but at a domestic level.
Ecuador and Argentina are among the most expensive
I used to travel 2 times per year to Argentina now one.
And he crossed to Tumbes to take a plane that is much cheaper than from Quito.
The same if you travel to Europe from Bogota and the return to Quito you will find by 550 while from the capital of Ecuador 950.
And from grass to Bogotá with a few miles and 9 dollars you arrive in the coffee capital
And a lot of people are doing what you do, cross the border to take other flights. Incredible.