A cargo airline in Argentina can be a good investment opportunity to meet local exporters’ needs for transportation. Although Argentina is in the midst of economic uncertainty, it is one of the largest economies in South America with a GDP of US$518.4 billion in 2018, and a population of 44.27 million.
Despite the current uncertainty in Argentina, booming industries have seen a rise in exports. In 2018, overall exports grew 5%, and in 2019, vine exports grew 11% in the first nine months. Future prospects for Argentina also predict an increase of the air transport market in the future.
Due to an increase in exports for niche industries and the future increase in the air transport market in Argentina, there are opportunities for investment in providing cargo airline services.
Regulations governing air freight and cargo airlines in Argentina
The National Civil Aviation Administration, ANAC (Administración Nacional de Administración Civil) is in charge of issuing airline licenses and regulates most aspects related to aviation in Argentina.
Aviation governance in Argentina includes laws, decrees, international agreements, regulations, and other specifications.
- Convention on Civil Aviation of Chicago (1944) Accession by Decree 15,110 / 1946, ratified by Law 13,891 / 1949
- Argentine Aeronautical Code (Law 17,285)
- National Politic of Aerocomercial Transport (Law 19.030)
- Deregulation of Cargo Air Transport Decree (1,492)
- Grant of Airports and creation of ORSNA (decree 375)
- Reestatization of Argentine Airlines (Laws 26,412 and 26,466)
In addition, since bilateral agreements are consulted when defining a foreign airline services, these are important regulators as well.
Steps to register your cargo airline in Argentina
Take advantage of a growing export environment in niche industries in Argentina by offering new or differentiated routes and options to traders.
It’s crucial to first understand the steps you must take – and which order to take them – to successfully register your cargo airline in Argentina.
1. Register a branch in Argentina
Before applying for an aeronautic license, investors must register a legal entity in Argentina. In Argentina, there are different types of entities to incorporate a business, however, foreign carriers must register as a foreign branch of their parent company.
Foreign companies in Argentina have to register at the Public Registry of Commerce (Registro Público de Comercio) and they can operate through two types of entities: a subsidiary or a branch. In the case of a foreign carrier, it must register as a branch. The registration process must follow specifications of section 118 of Corporations Law N. 19.550.
Branches in Argentina are separated from their matrix (parent company), they have their own rights and duties. Additionally, compliance documents must be held separately – for example, financial statements of the branch must be submitted before the Public Registry of Commerce in Buenos Aires, Argentina.
The requirements to register a branch in Argentina are a qualification report, documents of proof, a notice in the Official Journal, Signed documents and a registration fee.
Once all requirements are met, investors can proceed to register its branch at the Public Registry of Commerce.
2. Apply for authorization for a cargo airline in Argentina
After registering a branch, investors can apply for flight authorization and approval (Autorización y Aprobación de Vuelos). Aeronautic licenses are granted considering specifications including routes and demand. These licenses are valid for a period of 15 years, but they can be renewed.
Before applying for the authorization for a cargo airline in Argentina, the company must be designated by its government of origin. This designation must specify routes, frequency of routes, and aircrafts authorized for operations. Additionally, this designation must be submitted via diplomatic channels. Doing this is a way to officially introduce your proposal.
After the government from your home country approves this designation, you can begin the application process for authorization.
Required documents for authorization application
This application process is handled by ANAC and the authorization application must contain:
- Business name
- Information regarding the type of service: cargo and passengers, only cargo, mail, and cargo, etc. It also should include details on the routes, frequencies and aircraft equipment. All services must be contemplated in the current bilateral agreements between the two countries in question.
- Constitution of special domicile in Buenos Aires, in accordance with Law 19.549
- Proof of company existence and an address in Argentina with a legal representative.
- Powers to the individual with mandatory functions in the company.
After all the requirements are met for authorization, ANAC will notify parties that a public hearing will be held before any license is issued. In addition, countries that have bilateral agreements may be exempt from this.
After the authorization is approved and previous to beginning services, the following documentation should be attached as well:
- Certificate of registration and airworthiness of the aircraft, aircraft operating certificate
- Crew proposal and information
- An insurance policy that specifies the coverage regarding passengers, cargo, luggage, and civil liability
- Flight schedules with a certificate of approval by ANAC.
The certificate of registration and airworthiness, as well as the flight schedule certificate, must be processed and issued at ANAC.
3. Consider affiliation with the Cargo Accounts Settlement Systems (CASS)
After you register your cargo airline in Argentina consider affiliating to the Cargo Accounts Settlement Systems (CASS). CASS is a system by the International Air Transport Association (IATA) that takes care of the financial transactions between airlines and freight forwarders. It operates through an e-billing solution which aims to simplify operations for cargo airlines in Argentina and the rest of the world.
Affiliation to IATA can be a great asset to carry out more efficient operations with freight forwarders and offers benefits such as fewer auditing and quality assurance.
Doing Business in Argentina
Despite a tumultuous year for political and economic current events, Argentina is one of the largest economies in South America. Local labor is highly-skilled and relatively low cost. The country supports booming industries such as tourism, hospitality, agribusiness, motor vehicles, and recently ambitious projects to develop sustainable business, such as the ‘Vaca Muerta’ hydrocarbons programme.
The exporting industry is an important topic to the government. In this sense, there is a national program named “Argentina Exports” (Argentina Importa), which seeks to boost Argentine exports in the coming years. Furthermore, according to IATA, the number of passengers will double and the Argentinian air transport market will grow by 92% in the coming 2 decades.
High-skilled labor, niche exports and future air transport traffic make registering a cargo airline in Argentina an interesting option.
Register your cargo airline in Argentina with Biz Latin Hub
Investors interested in setting up cargo airline in Argentina should make sure to comply with all regulations with professional guidance.
Avoid any delays and issues with your company incorporation and make sure to comply with all regulations by obtaining legal assistance.
At Biz Latin Hub, we have a depth of experience in supporting businesses enter Argentina for over 5 years. We assist businesses with commercial representation, business incorporation, due diligence, visa processing and back-office services tailored to their needs. Our team of expert local lawyers and accountants is ready to assist you. For more information, contact us here and get started. Learn more about our team and expert authors.
Check our short video on reasons why to do business in Argentina.