Traveling: an expensive pleasure in Latin America

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Boarding fees and taxes are responsible for air tickets in Latin America are above the values offered in Europe and Asia

Traveling: an expensive pleasure in Latin America

Flying in Latin America is expensive. Compared to European airlines, the cost of tickets in Latin America exceeds those of Europe and Asia, or at least that can be deduced in the Global Flight Price Ranking report. A study carried out by the Rome2rio web portal that analyzes dozens of domestic airlines on the planet.

Leer en español: Volar: un placer costoso en América Latina

The ranking, which takes into account the cost per seat-kilometer available, is led by companies from the Middle East and Southeast Asia, being the cheapest to travel Tiger Air (Australia), with a value of 6 dollar’s cents per kilometer, equivalent to 50 Chilean pesos or 250 Colombian pesos, which would not even reach a liter of gasoline.

The second cheapest airline in the world is AirAsia X (Malaysia), with a rate that reaches $ 0.07. The third place is for Air Asia (Indonesia), which charges 8 cents per kilometer.

The report, which compares ticket values between January and February 2018, has no Latin companies among the 50 cheapest airlines on the planet. As for international travel, AirAsia X charges 0.07 dollars in a transfer between the United States and the Asian continent. For the same route, Air India Express is in second place with 0.08 dollars per kilometer and in third place is the Icelandic company First Air, with 9 cents per kilometer.

On the other hand, if the value of the tickets were established only by the kilometers traveled between two points, Chile would be the cheapest country on the planet, this thanks to the massive entry of low-cost airlines as the case of JetSmart, which offers tickets at 0.09 dollars per kilometer. There is also Sky Airline, with 0.11 cents and Latam Chile, with 0.13, which offer economic transportation within the country and its neighbors Peru and Argentina.

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Why traveling is so expensive?

The boarding fees and taxes make the final value of tickets in Latin America increase for the consumer, so it can be deduced in the Comparative Analysis Cost of Domestic Boarding Costs in Chile and Latin America, advanced by the Chamber of Commerce from Santiago.

The study shows that "domestic operations, approximately 50% of the airline's operating costs are taxed with VAT (Value Added Tax), with fuel usually being the most relevant, followed by charges for airport services, marketing (commissions and sales services), and then minors such as cleaning and catering ".

And he adds that "When VAT is applied on tickets, a VAT debit is generated, but also the VAT credit. Therefore, when this sales tax exists, the airline recovers approximately 50% of its VAT cost, which causes a decrease in its operating expenses that ranges between 6% (Peru) and 10.5% ( Argentina, given that the VAT is 21%, but the national air tickets are only taxed with 50% of VAT) ".

With the above, the ladder presents Mexico as the most expensive country in the region that has high tariffs, followed by Ecuador and Chile. Meanwhile, Argentina and Bolivia are the nations with cheaper domestic passages, this despite the fact that low-cost airlines have marked a before and after in the area.

LatinAmerican Post | Jorge Hernández

Translated from: 'Volar: un placer costoso en América'

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