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Regional News from Pta. Arenas.

Monday, May 5th 2003 - 21:00 UTC
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Headlines:
Unending DAP-Lan Chile controversy; 16,000 tons of salmon in 2007; Unemployment drops in Punta Arenas;

Unending DAP-Lan Chile controversy

A strong statement denying any monopolistic conduct was published by Lan Chile in the local press rejecting DAP' CEO Andrés Pivcevic claims that the Chilean flag carrier has interests in several airports and sponsors barriers for new companies wishing to compete in the domestic market. "It's absolutely false that Lan Chile manages airports through associated companies", said the release adding that Lan Chile has a minimum participation, 20%, in two Chilean airports. Similarly they describe as "absurd" the alleged existence of barriers to new companies recalling that it's the "Civil Aviation Agency and the Ministry of Public Works, and not the beneficiaries of the concessions who set the rules". Lan Chile "ratifies that there are no barriers to the air business with the current open skies policy, therefore we do not understand on what basis Mr. Pivcevic reiterates these inexact and unfair claims". Mr. Pivcevic recently insisted with claims of restrictions to free competition in the Chilean air industry because of the monopolistic position held by Lan, recalling that seven years ago the company was sanctioned, and fined, by the Anti-monopoly Commission given its business practices contrary to competition. DAP's CEO stresses that Lan Chile has paid no attention to sanctions since they are insignificant compared to the abusive benefits of its condition of monopolistic operator. "Lan Chile's overwhelming hegemony in air passenger and cargo transport curtails any possible competition and is a huge barrier for any prospective new company", underlined Mr. Pivcevic. DAP still has a pending 1996 court case against Lan Chile for allegedly dumping air fares and forcing the Pivcevic family out of business in the Punta Arenas-Santiago route. Lan Chile's release also refers to air rates, another of Mr. Pivcevic's criticism, arguing that if they applied the same criteria as DAP, which charges the equivalent of 40 US dollars for a 24 minutes flight between Punta Arenas and Porvenir, round trip, "Lan Chile's fare to Santiago from Punta Arenas should be 473,000 Chilean pesos (675 US dollars) and not 105,500 Chilean pesos (150 US dollars), as we currently charge". Lan Chile raised air fares last January and again in March, alleging fuel costs, which was not well received by Magallanes population and Congressional representatives. However it has now become common that every time Lan Chile hikes fares or makes decisions that hinder or irritate Punta Arenas clients, Mr. Pivcevic makes strong press statements demanding more competition. Lan Chile is currently the only carrier to Punta Arenas after having successfully pulled out of the market not only DAP, but Avant, Aerocontinente and Ladeco that was formally absorbed by the flag carrier several years ago.

Joint navy exercises Chile-Peru

Chilean and Peruvian navies will be deployed in joint exercises in the second half of the year, following an agreement in Santiago between the Commanders in Chief of the two navies, Admirals Miguel Angel Vergara and Ricardo Arboccó. The first stage of the exercises named "Pacific" will take place while vessels from both navies sail to Hawaii to participate in the international "Rimpac 2003" exercises and then in Ecuador when they join this year's edition of the United States sponsored "Operation Unitas". A second chapter will take place under the name of "Neptune" targeted to jointly address contamination emergency situations in common maritime areas. "For years we've had a close relation with Chile, we have officers and personnel exchange programs, joint operations in naval academies", indicated Admiral Arboccó to the Chilean press. During his visit to Chile Admiral Arboccó was presented with a replica of the Peruvian cruiser "Huáscar" binnacle and medals of the Peruvian Admiral Miguel Grau. The "Huascar" the lead ship of the Peruvian fleet was captured by the Chileans during the 1879 Pacific War when Peru and Bolivia in alliance fought Chile. The vessel has a special significance since both major naval heroes of Chile and Peru, Arturo Prat and Miguel Grau died on board in combat. Chilean marines will also be participating in humanitarian support exercises with the French Navy in Polynesia. "Marará" exercises are scheduled for this month and will include French naval forces stationed in New Caledonia and in the Polynesian archipelago and will focus support efforts and peace keeping operations in situations of natural disasters such as hurricanes, seism and tropical storms. "The purpose of the exercise is to "promote the integration of two nations with common interests and sovereign territory in Polynesia", reads the official release.

16.0000 tons of salmon in 2007Pesca Chile a company located in Punta Arenas with an annual production of 4,000 tons of salmon has plans to boost output to 16,000 by the year 2007. In April Magallanes Regional Environment Commission granted the company three areas to fatten salmon with specific conditions targeted to protect and conserve the habitat of other species. "Our objective is to consistently increase production and reach the project's original goal", indicated Mr. Drago Covacic, Pesca Chile General Manager, adding that by the end of the year "we should have a biomass of 4,000 tons, and in 2004 8,800 tons". Magallanes harvested salmon is processed in the plant of Nova Austral in Porvenir where the average 3,8 kilos salmon and 2,4 kilos trout are filleted and packed ready for supermarkets. "We still have some transport problems to overcome taking the salmon from the farms to the processing plant, but we expect to improve that aspect of the industry towards the end of the year", said Mr. Covacic. Live Atlantic salmon is selling at 2,5 US dollars and once processed is shipped mostly to Europe. Japan demands most of the trout.

Unemployment drops in Punta Arenas

Unemployment in the first quarter of 2003 in Punta Arenas reached 5,8%, 0,3% less than the previous quarter and a 0,1% fall compared to a year ago, according to the latest release from the Chilean Statistics Institute. Bernardo Troncoso, regional Economic officer said that Magallanes has the third lowest unemployment rate in Chile, --which compares favorably with the national average of 8,2%--, and has seen a positive reversal in the job creation tendency. Magallanes labor force now stands 66,840 with an interesting recovery in agriculture and fisheries; retailing; and construction. Mines and quarries, plus financial services suffered job losses. Mr. Jorge Restovic, Regional Labor official anticipated that this coming winter as in previous years the government will be financing the Learning Program that helps unemployed learn new trades. At Chilean national level unemployment also experienced an encouraging 0,6% drop with the number of unemployed reaching 495,370 equivalent to 8,2%. In the first quarter the Chilean labor force grew by 0,5% compared to the previous quarter and stands at 6,053,980, while the number of employed is 5,558,610, a 3,1% jump over a year ago and 0,1% over the previous quarter. Unemployment among men was 7,3% and 9,8% for women. However unemployment in metropolitan Santiago, where most of the Chilean population is concentrated, was 12,8% with a 0,5% decrease from a year ago, but a 0,9% increase over last December, according to the Economics School of the University of Chile. This means that there are 359,900 unemployed in Santiago. Construction, government and financial services have the highest readings with 19% followed by transport and manufacturing that recorded 10%. Chilean president Raúl Lagos said that the 8,2% unemployment at national level "was satisfactory since it means that in the last twelve months 165,000 new jobs were created" . Nevertheless President Lagos also admitted the government "can't be happy when 490,000 Chileans are out of a job", and simultaneously announced the implementation of an employment incentive program. According to the program every company that contracts new personnel will be entitled to a monthly bonus equivalent to 40% of the minimum wage plus another an only once 70 US dollars for training. The program is geared to contract 55,000 workers, plus the 62,000 jobs created in 2002 with a similar initiative. "All indicators, jobs, consumer lending, house sales and retailing, show strong signs of a solid recovery, something which we hadn't seen since the Asian crisis several years ago", said Finance Minister Nicolás Eyzaguirre.

Categories: Falkland Islands.

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