Peru is a big country, so many travelers take internal flights if they have limited time. As of August 1999, Aero Continente has effectively monopolized the domestic market. Prices have risen accordingly, and route coverage is limited. In July 1999, LanPeru, co-owned by LanChile, resumed domestic flights. There are also a handful of small airlines flying to remote destinations in light aircraft. There's an 18% tax on domestic flights, but you can avoid most of this if you buy tickets abroad. There's also a US$4 departure tax on domestic flights. Use your international mobile phone rental to reserve an ailine ticket.
Public buses are the usual mode of transport over long distances. They are cheap, frequent and relatively comfortable, at least on major routes. When traveling between towns, have your passport with you as it will need to be shown at police checkpoints. Armed robberies on night buses are not unheard of in Peru, so travel on a day bus (or fly) if you have the option. Trucks often double as buses in remote areas. The fare is usually standardized according to the distance, but agree on the fare in advance. Local buses are slow, cheap and crowded; when you want to get off just yell out. Taxi fares need to be haggled over; there are no metered cabs. Use your Peru cell phone rental to call a cab easily.
The government-owned railways (INAFER) is facing imminent privatization. Services go from the coast to the highlands: The Central Railroad runs from Lima to La Oroya, where it branches north and south. The northbound line goes to Cerro de Pasco and the southbound to Huancayo; although there are plans to open the southern route to passenger trains, both of these routes are currently for freight use only. A short passenger line continues from Huancayo to Huancavelica. The Southern Railroad runs between Arequipa to Lake Titicaca and Cuzco. Services are cheap and fairly comfortable, but not particularly safe. Use your international cellular phone rental to make a train ticket reservation.
Boat travel is important in Peru's eastern lowlands. Dugout canoes powered with outboard engines operate as water taxis; larger cargo boats are often also available as water transport.