Argentina - Civil Aerospace: Government initiatives fuel volume growth (Strategy, Performance and Risk Analysis)
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Argentina is the second largest country in South America and has witnessed steady growth in airline passenger traffic due to easy visa policies and increased frequency of flights. Moreover, the introduction of low cost carriers (LCCs) in the country has led demand for narrow-body aircraft to rise. This has also resulted in the growth of the country’s active fleet size, attributed to increased procurement necessitated by the growing average fleet age of several major carriers. Air freight also increased due to growth in trade, transportation and demand for cargo aircraft in the country.
Increase in the frequency of flights and launch of low cost carriers to drive air passenger growth
Air passengers registered a growth of 5.8% from 14.2 million in 2015 to 15.1 million in 2016. Air passengers are forecast to increase at 7.3% CAGR from 16.6 million in 2017 to 22.0 million in 2021. The growth is due to easy visa policies and increase in the frequency of flights within South and Central America and outside the region, including countries such as the US and the UK.
Narrow body aircraft accounted for majority share and to drive to active fleet growth
Active fleet size in Argentina increased at 40.8% from 71 in 2015 to 100 aircraft in 2016. Moreover, it is forecast to increase at 10.2% CAGR from 101 in 2017 to 149 aircraft in 2021. The growth can be primarily attributed to the increased procurement necessitated by the increasing average age of the fleet of several major carriers and the emergence of new low cost carriers.
Demand to serve domestic routes and long haul operations to drive narrow and wide body active fleet
The active fleet size for narrow body aircraft in Argentina increased at 39.3% from 61 in 2015 to 85 in 2016. Moreover, it is forecast to increase at 9.5% CAGR from 85 in 2017 to 122 in 2021. The growth in Argentina is majorly due to the increased demand for low aged used narrow body aircraft on major domestic routes because of their higher fuel efficiency led by lesser weight. The number of active wide body aircraft in Argentina increased at a rate of 50.0% from 10 in 2015 to 15 aircraft in 2016 and estimated to increase at 14.0% CAGR from 16 in 2017 to reach 27 carrier by 2021, primarily attributed to demand for long haul operations.