Transportation Industry

Company Watch - Aerolineas Argentinas

AirGuide Business, Sept 8, 2008

Sep 7, 2008

Argentine Senate authorized the renationalization of Aerolineas Argentinas by a 46-21 vote. The legislature now will negotiate the purchase price for AR and its Austral Lineas Aereas subsidiary. Sep 5, 2008

Aerolineas and Austral operate 80 percent of domestic flights and employ some 9,000 workers. They compete with Chile's LAN Airlines. Aerolineas Argentina was on the verge of bankruptcy in 2001 when Marsans bought it from a group controlled by the Spanish government. The company was first privatized in 1990. The country's transportation secretary accused Marsans last month of "draining" Aerolineas and said he did not think the government should have to pay anything for the airline, which was estimated to have debt worth about USD$900 million. One change lawmakers made to the original bill was to take out any mention of re-privatizing the airline in the future. Sep 3, 2008

Argentina's Senate voted on Wednesday to bring faltering airline Aerolineas Argentinas back under state control in the government's latest move to expand its presence in key sectors. Congress approved the outlines of a government agreement reached in July to purchase all the shares that Spanish travel group Marsans holds in Aerolineas and its Austral unit. But the two sides are still negotiating a price for the country's biggest airline, and Congress will review that figure separately. The ruling Peronist party and its allies passed the measure after more than 10 hours of debate, with 46 legislators voting for and 21 voting against. Lawmakers modified the original government bill, showing greater initiative in the aftermath of a mid-July Senate vote that quashed a government proposal to raise taxes on soy exports -- a proposal that sparked a four month farm revolt. That vote was a major political blow to President Cristina Fernandez, whose popularity sank during the farm conflict. Regarding Aerolineas, Fernandez said the state had no choice but to buy out Marsans because the heavily indebted airline was behind on salary payments. Sep 3, 2008

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