Research Overview

South America has experienced significant growth in the last 10 years, but it was focused only on specific countries. Driven by the Brazilian market, the continent has experience an influx of new destinations, especially from the North American market.

The low average income GDP per capita is a significant deterrent, and the complicated political framework and high cost of operations for air services make South America a challenge for most international carriers. The lack of communication between governments, and the failure of the Mercosur as a political binding association, makes the regional market in the continent one of the underperformers of the globe. The constant swing in government policies from populism to liberalism makes it impossible to maintain coherent policies over a long period of time, thus stopping private investment firms from developing infrastructure in the continent.

One of the clear examples is Argentina, in which its centralized government and protectionist policies avoid creating competition for the national carrier Aerolineas Argentinas, and create a huge gap of service and loss of revenue for the aeronautical industry in the country.