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The government of Ecuador completely eliminated the subsidy aviation fuel Jet A1 In DAC airports and delegates to municipalities.
After the return of subsidy in the year 2017 exclusive for airports administered by the DGAC and in those delegates to municipalities, But not concessioned, Ecuador once again eliminates this benefit for airlines that operate at these airports.
It is so that from this 12 August is eliminated to Jet A1 for Manta Airports, Store, Santa Rosa, Coca and Cuenca, the only ones that made use of this benefit at the moment since they have regular commercial service.
Ecuador eliminates Jet A1 fuel subsidy
Via presidential decree No. 83 of the 11 august 2025, The national government has presented modifications to the codified regulation of prices of hydrocarbon derivatives, in which the articles that allowed granting aviation fuel subsidy.
Change is following:
- Unique item.- Amend the Codified Regulation of Price Regulation of Hydrocarbon Derivatives in accordance with the following:
- A).- Eliminate the numerals 1.2.2, 1.2.3 and last paragraph of the paragraph 1.2 of the article 1.
What changes in the presidential decree?
Natural or legal persons (airlines) that operate inside and outside the Ecuadorian territory, that have aircraft built from the year 1990, who have a valid Air Operator Certificate and provide air transport services for national and international passengers and international cargo from Ecuador, will pay the terminal sales price determined under the calculation methodology established in section 1.2.1, minus the 40%, as long as they operate on routes that include airports that are under the comprehensive administration of the General Directorate of Civil Aviation and airports delegated to the Municipal Authority., that they have not been concessioned, except for the route to the Galapagos Islands and the supply for technical stops.
The same way, national natural or legal persons and foreign companies(airlines) that provide international passenger air transportation service, Mail and load combined, that begin operations to or from Ecuadorian territory on international routes that include any of the country's airports, will pay the terminal sales price less the 40%, For a period of three (3) years, counted from the beginning of its operations, as long as they meet each of the following conditions:
a) Have aircraft built from the year 1990;
b) Satisfy the technical requirements of the stage 4;
c) Be the first to provide international passenger air transport service, mail or cargo in combined form on one or several international routes prioritized by the Production Sector Council: and,
d) They must operate on the authorized international route (direct without stops) At least three (3) flights per week (Ida-Vuelta).
In no case will the terminal price without VAT of Jet Fuel be less than USD 1.25 per gallon.
All this is eliminated, So there is no more Jet A1 fuel subsidy in Ecuador.
Will this measure affect Ecuadorian aviation??
In part, yes there will be an impact, But on a medium scale, since not all airports were using these incentives, Let's take into account that the 40% It is an important value that was discounted in the value of Jet A1 and it is the highest cost an airline pays in its operational costs. Remember that today there are already complaints about the prices of tickets from Cuenca, imagine what will happen from today.
On the other hand, Remember that tickets are sold in advance with a subsidized Jet A1 price from Manta and Cuenca, this change at the last minute and without prior notification to the industry, will generate an increase in airline operating costs, which already charged value, But with a lower price, Who assumes that additional value??
Thus, The flights of Copa Airlines could see an increase in their fares to and from Manta International Airport from Panama, route that is reaching up to a daily flight (temporal) and could show a brake on its growth in this route that until today shows solid growth.
Too, We have flights to Cuenca, which are currently the destination that is growing the most in Ecuador With demand, passengers and frequencies. They just even 8 daily flights that the Marshal La Mar They used subsidized fuel for their flights to Quito and Guayaquil, But from this moment they have lost this benefit, which may directly imply an impact on prices and therefore, a direct decline in flight demand.
Let's not forget that this subsidy benefit also applies to routes to DGAC and municipal airports without a concession., This means that the routes from Quito to Loja, Santa Rosa and Coca will also be affected by the elimination of the incentive.
The idea is clear, subsidy is eliminated, Air ticket prices rise to/from Manta, Store, Coca, Santa Rosa and Cuenca, which would generate a reduction in demand. I will be attentive to these possible changes in market behavior that may occur in the coming days and weeks..
What do you think of this measure??
