Airlines in Chile Regulatory Changes Analysis¶
Potential Regulatory Changes¶
The airline industry in Chile operates under a well-defined regulatory framework, primarily overseen by the Dirección General de Aeronáutica Civil (DGAC) for safety and operational standards and the Junta Aeronáutica Civil (JAC) for commercial aspects, promoting free market access and pricing. The competitive environment is also subject to oversight by the Fiscalía Nacional Económica (FNE) and the Tribunal de Defensa de la Libre Competencia (TDLC). While the current framework is relatively liberal, several areas present potential for regulatory changes or increased focus that could impact the value chain.
One potential area is the strengthening of environmental regulations. With increasing global pressure regarding climate change and sustainability, Chile may implement stricter environmental standards impacting airlines. This could involve more stringent emission standards, potentially aligning more closely with international initiatives like CORSIA, or new regulations around noise pollution, particularly near urban airports. Such changes would directly influence aircraft acquisition decisions, favoring newer, more fuel-efficient models, and could lead to operational adjustments in flight paths and procedures.
Another area involves consumer protection regulations. Although not detailed extensively in the provided text, JetSMART's efforts to reduce passenger complaints suggest that regulatory bodies might increase their scrutiny on customer service standards, complaint resolution processes, and the transparency of pricing, especially concerning ancillary services. Potential changes could include clearer rules on compensation for delays and cancellations, baggage handling liability, and the presentation of unbundled fares.
Furthermore, changes related to airport infrastructure and fees are likely, driven by the Ministry of Public Works' announced investment plan of over US$3 billion in 19 airports. While aimed at improving capacity, this investment could lead to revised airport fee structures (landing fees, passenger charges, handling costs) to recover investment costs. Regulatory changes in this area could impact the operating costs for airlines across all business models.
Regulations concerning labor and personnel qualifications could also see evolution. The reported personnel shortages in the region, including pilots and maintenance technicians, might prompt regulatory or governmental initiatives to address training and certification processes, potentially impacting labor availability and costs for airlines.
Finally, while Chile has a liberal "open skies" policy, there could be regulatory adjustments related to competition policy in response to the dynamic market share shifts and the dominance of key players. Although unlikely to revert to protectionism, the FNE and TDLC may become more active in scrutinizing alliances, mergers, or practices perceived as anti-competitive, influencing strategic partnerships and market entry conditions.
Table of potential impact of the changes¶
| Potential Regulatory Change | Impact on Value Chain Stage (e.g., Aircraft Acquisition, Flight Ops) | Potential Impact (Positive/Negative/Neutral) | Impact on Business Models (LATAM/SKY/JetSMART) |
|---|---|---|---|
| Stricter Environmental Regulations (Emissions, Noise) | Aircraft Acquisition & Maintenance, Flight Operations, Fuel Management | Negative (Increased Costs), Positive (Innovation) | All airlines face increased investment pressure for newer aircraft and operational adjustments. LCCs with newer fleets might be slightly better positioned initially. |
| Enhanced Consumer Protection Regulations | Marketing & Sales, Passenger & Cargo Handling, Ancillary Services | Negative (Increased Costs, Reduced Revenue from Ancillaries), Positive (Improved Reputation) | Primarily impacts LCCs/ULCCs (SKY, JetSMART) reliant on unbundled services and potentially facing higher complaint volumes; increased compliance burden for all. |
| Revised Airport Infrastructure & Fee Structures | Network Planning & Scheduling, Passenger & Cargo Handling | Negative (Increased Operating Costs), Positive (Improved Efficiency) | Impacts all airlines; potentially higher relative cost impact on LCCs due to lower base fares; improved infrastructure could benefit all through faster turnarounds. |
| Changes in Labor/Personnel Regulations | Aircraft Acquisition & Maintenance (MRO), Flight Operations (Crew Management) | Negative (Increased Labor Costs, Potential Availability Issues) | Impacts all airlines; could exacerbate existing personnel shortage challenges, increasing operational costs. |
| Increased Competition Policy Scrutiny | Network Planning & Scheduling, Marketing & Sales, Aircraft Acquisition (Strategic Partnerships) | Neutral to Negative (Constraints on Strategic Moves), Positive (Fairer Competition) | Could affect strategic decisions, alliances, or market practices of dominant players (LATAM) and potentially LCC expansion strategies. |
References¶
- ¿Qué aerolíneas están funcionando en Chile? en Recomendaciones de viajes - Turismocity. (2024, March 26). https://www.turismocity.cl/blog/Recomendaciones_de_viajes/p-Que-aerolineas-estan-funcionando-en-Chile-4329.html
- Aviation Laws and Regulations Report 2025 Chile - ICLG.com. (2025-03-07). https://iclg.com/practice-areas/aviation-laws-and-regulations/chile
- Cuatro aerolíneas internacionales dejan o reducen vuelos a Chile: sorpresa y preocupación de funcionarios - Aviacionline. (2024, April 15). https://aviacionline.com/2024/04/cuatro-aerolineas-internacionales-dejan-o-reducen-vuelos-a-chile-sorpresa-y-preocupacion-de-funcionarios/
- A Guide To Business Aviation Flight Operations In Chile. (2024-11-06). https://www.univ-serv.aero/chile-aviation-operations/
- Aviation Law - Prat y Cia. https://pratycia.cl/wp-content/uploads/2022/04/AVIATION-LAW-2022.pdf
- ¿Dónde ganó más participación Latam Airlines en 2024? Perú en internacional, Chile en el mercado doméstico - La Tercera. (2025, March 19). https://www.latercera.com/pulso/noticia/donde-gano-mas-participacion-latam-airlines-en-2024-peru-en-internacional-chile-en-el-mercado-domestico/Y6Y2R3K7EJD7FJXG3FM74N74TM/
- Understanding the pandemic's impact on the aviation value chain - IATA. https://www.iata.org/en/iata-repository/publications/economic-reports/understanding-the-pandemics-impact-on-the-aviation-value-chain/
- An analytical model for the assessment of airline expansion strategies - ResearchGate. https://www.researchgate.net/publication/266445769_An_analytical_model_for_the_assessment_of_airline_expansion_strategies
- An analytical model for the assessment of airline expansion strategies | Moreira. https://repositorioaberto.uab.pt/bitstream/10400.2/3214/1/An%20analytical%20model%20for%20the%20assessment%20of%20airline%20expansion_strategies.pdf
- Main Developments in Competition Law and Policy 2024 – Chile. (2025-03-19). https://하고자-하는-바를.한국/images/Antitrust/Chapter_Antitrust_Law_2025_Chile.pdf
- JetSMART confirma procesos para reducir alta cantidad de reclamos de pasajeros. (2024, April 16). https://aviacionline.com/2024/04/jetsmart-confirma-procesos-para-reducir-alta-cantidad-de-reclamos-de-pasajeros/