I haven’t even been back in Argentina a full day and the dollar blue hits a record high of $15! That’s immediately followed by American Airlines announcing that they are restricting ticket sales in Argentina. Ahh, financial uncertainty how I’ve missed you.
American Airlines will no longer sell tickets to or from Argentina for purchase in pesos for more than 90 days out. Want to fly from Buenos Aires to New York after December 18? Sorry, you’ll have to choose a different airline (while you can).
American is implementing this measure because of the widening gap between the official exchange rate ($8.43) and the blue rate ($15.00). Without knowing where this will end up, they do not want to get stuck holding pesos that become more and more worthless everyday.
So, here’s why American Airlines is not happy (and how you can benefit)…
Assume I want to go from Buenos Aires (EZE) to Miami (MIA) for a week in October. If I”m on the American Airlines website in the United States, the fare comes out to U$S 1213. Switching my country to Argentina, I find the same flight for U$S 1688 (higher due to the 35% Argentine tax on travel). Which one do I book?
Well, paying for that U$S 1688 flight on my Argentine credit card, I’d get billed at the official exchange rate, and end up with a charge of ARS $14,230. Now, if I convert my dollars at the blue rate to pay off the credit card, I’d only owe U$S 949. That’s a savings of almost 25% off the flight for me!
The 35% travel tax implemented by the government last December was designed to make this practice less attractive, but since the gap between the official rate and blue rate keeps widening, this is once again an attractive option for booking tickets.
Only time will tell what happens next…