Wednesday, August 21st 2013 - 18:50 UTC

Chile/Argentina row: Lan Chile evicted from Buenos Aires metropolitan terminal

Chilean president Sebastián Piñera has instructed Foreign minister Alfredo Moreno to immediately contact Argentine authorities following the decision by the government of President Cristina Fernandez ordering Lan Chile to move out from the metropolitan airport of Aeroparque in Buenos Aires.

President Piñera instructed foreign minister Moreno to contact Argentine authorities

Aeroparque is next to the River Plate and a few minutes drive from downtown Buenos Aires

Minister Moreno with his peer Timerman

Moreno who has on several occasions informed his peer Hector Timerman of Chile’s disappointment with Argentina’s air industry and airports authorities attitude towards Lan Chile, is also in permanent contact with Latam CEO Enrique Cueto.

Chilean lawmakers reacted strongly to the latest Argentine measures against Lan Chile describing it as a ‘persecution policy’.

“The attitude of the Argentine government towards Lan is of outright persecution. For any integration process, this latest measure and trade protectionism are clearly contrary to that spirit. What has been done to Lan is not a problem for the private sector, the foreign ministry must be involved in the defence of the Chilean company’s interests”, said Senator Hernan Larrain member of the Foreign Affairs committee.

The Chilean business community also expressed its disappointment and the president of the Production and Commerce Confederation Andres Santa Cruz said “of course we are very much concerned with the situation. We are ready to support the company if they request us”.

Lan and Brazil’s Tam which have joined into Latam, Latinamerica’s largest airline informed of the Argentine eviction decision Wednesday morning to the Chilean Securities Commission. Latam shares have fallen in world markets.

Lan on Wednesday reported that Argentina’s Airports System regulator, Orsan, had notified the airline that it must abandon the hangar it operates in Aeroparque Jorge Newbery, the metropolitan air terminal in Buenos Aires.

The recently refurbished hangar with an investment of five million dollars houses Lan Argentina’s operations that includes 12 aircraft and 14 destinations in Argentina. Despite all the impediments legal and not legal imposed by local authorities, Lan Argentina already controls 30% of the country’s domestic market.

Apparently the eviction is part of a plan to have only government owned Aerolineas Argentina and Austral operate from Aeroparque, since other small airlines have already been moved out.

Lan Argentina was given ten days to move out from Aeroparque despite a signed contract which expires in 2023.

However it must be pointed out that both re-nationalized Aerolineas Argentinas and the Orsan regulator are under the control of La Campora, a political youth group that responds to Maximo Kirchner, the son of President Cristina Fernandez.

The CEO of Aerolines is a young lawyer, son a Peronist lawmaker and who has no background in the air industry and has been unable to cut the airline’s huge daily deficit (two million dollars per day according to congressional reports), despite having a fleet of new aircraft for domestic flights.

Likewise the head of Orsna is Gustavo Andres Lipovich, a young teacher with a degree in Geography, who previously was the government’s representative in Aeropuertos Argentina 2000, the consortium which has the concession of most of Argentina’s air terminals, and Uruguay’s Carrasco international airport and now is a close friend of the Kirchners: Eduardo Eurnekian.

Eurnekian also financed the Malvinas memorial at Darwin in the Falklands where many Argentine combatants are buried.

This is not the first time Lan Argentina has had to face obstacles from local authorities. The latest was a dispute in May with the Aeroparque services company Intercargo, also under the control of La Campora, which unilaterally and despite a court order cancelled all its ground services to Lan alleging a debt and demanding a review of the contract that expires in 2014.

Intercargo provides ramps, passenger boarding telescopic tubes, luggage handling, manages passenger buses to terminals, cleans aircraft cabins, among other services. With the exception of Aerolineas Argentinas and American Airlines Intercargo services all other airlines operating in Argentine air terminals.

The original contract of Lan Argentina for these services was 32.4 million dollars annually but Intercargo was demanding an additional 18 million dollars.

The conflict came to an end when Lan accepted the new terms for the services and to pay the additional millions of dollars.

Ignacio Cueto who was in Colombia for the inauguration of a flight with bio-fuel announced he was flying to Argentina and anticipated that his solicitors would be appealing the ‘illegitimate’ decision.


43 comments Feed

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1 yankeeboy (#) Aug 21st, 2013 - 07:17 pm Report abuse
LAN should withdraw from Argentina, make them all unemployed and let Aerolineas pick up all the empty routes so they can lose even more U$.

Does at least 1 major company a week leave Argentina now?
2 Anbar (#) Aug 21st, 2013 - 07:24 pm Report abuse
Is it just me or does the Argentine Government appear completely and totally schizo atm...?

Well, even more so than usual...
3 yankeeboy (#) Aug 21st, 2013 - 07:26 pm Report abuse
No it's not just you

Clearly the lunatics are running the asylum
4 Klingon (#) Aug 21st, 2013 - 07:28 pm Report abuse
Another day at the office for Aerocampora!
On the same day the botox hag was trying to kiss and make up with the business community in Rio Gallegos.
5 ElaineB (#) Aug 21st, 2013 - 07:30 pm Report abuse
LAN is a profitable airline. Aerolineas loses two million dollar per day.

I once sat next to a former Argentine pilot on a flight from Santiago to Lima. He explained in great detail why Aerolineas is such a disaster. The pilots work around 1/4 of the hours worked by other airlines and this overstaffing extends throughout the company, That is before La Campors steals money for their coffers.
6 BOTINHO (#) Aug 21st, 2013 - 08:32 pm Report abuse
Reading this article, with the details about AEROLINAS ARGENTINAS, ORSNA and INTERCARGO, I feel like I've stumbled into Bedlam.
7 geoff nolan (#) Aug 21st, 2013 - 08:40 pm Report abuse
Wouldn't it be nice to know more of the particulars of the new agreement with Chevron. Once the venture gets up and running and begins to turn a profit the government will likely come to the conclusion that it was unfairly taken advantage of by the behemoth hegemonic vultures. There will have to be a “ajuste de cuentas” to put an end to the ceaseless exploitation and yada yada yada. How tiresome.
8 cornelius (#) Aug 21st, 2013 - 08:51 pm Report abuse
It is A corrupt country run by ex guerrillas Montoneros Videla failled to kill all of them and know here is the result !
9 Ernie4001 (#) Aug 21st, 2013 - 10:51 pm Report abuse
@1 Agree, LAN finally withdraw and is the best thing that can do. With these corrupts running the country there is no room to sign new contracts or anything like it. More than 3000 workers will pay the price. Obviously LATAM will retaliate in Chile and Brasil.
10 Troy Tempest (#) Aug 21st, 2013 - 11:38 pm Report abuse
Aren't there some major events coming to Brazil very soon? :-)

Won't that be a busy time for visitors by air? Surely, Brazil will give preference to their own airline now.
LATAM can withdraw from Argentina, and overfly Paraguay between Chile and Brazil.

What does Mercosur think of this Protectionism?
11 Think (#) Aug 22nd, 2013 - 12:31 am Report abuse
Nice picture of Aeroparque!

On the upper right one can even see “Casa Think” and me ol' childhood playgrounds......
12 The Truth PaTroll (#) Aug 22nd, 2013 - 12:33 am Report abuse
While I don't particularly enjoy or even agree with this measure, ultimately I have to give the benefit of the doubt to the argentine side over the foreign side.
13 Anglotino (#) Aug 22nd, 2013 - 01:33 am Report abuse
Foreigner investors are getting scared away and Think is talking about a playground and Nostril's is unsure who to believe.

No wonder it takes a financial crisis to concentrate an Argentine's mind.
14 Mr Ed (#) Aug 22nd, 2013 - 02:29 am Report abuse
Well in Argentina the government used to give free one-way helicopter trips over the River Plate, even if you disagreed with them.

If all flights are run by the government irlines, I fear that more than a few might stop short of the advertised destination.

So how is the plan to offer flights to the Falklands coming on? Piñera is at least not having to choose between keeping flights in Argentina and flights to the Falklands.

You cannot invest in Argentina any more, but you can still make donations to La Cámpora and friends.
15 Redrow (#) Aug 22nd, 2013 - 03:25 am Report abuse

“While I don't particularly enjoy or even agree with this measure, ultimately I have to give the benefit of the doubt to the argentine side over the foreign side.”

This is perhaps the saddest Argentine post i have ever read on this forum. You realise your country is in the wrong and going down the tubes but can't bring yourself to say or do anything to make it better.
16 Ayayay (#) Aug 22nd, 2013 - 04:50 am Report abuse
So the Kirchner youth now control all international ingress and EGRESS, or am I missing something?
17 Austral (#) Aug 22nd, 2013 - 05:02 am Report abuse
On a practical level, is this really meant to occur within 10 days? Personal interest here, I have a flight booked from Santiago to AEP (on LAN of course) and hope that it is not going to arrive at Ezeiza...

Chile and Brazil have to retaliate. No AR flights should be able to land in either Chile or Brazil from AEP until it is sorted.
18 Clyde15 (#) Aug 22nd, 2013 - 05:46 am Report abuse
So much for the much vaunted LATAM solidarity. Do I sense an unraveling of the supposed structure of friendship and cooperation in S.A. or was it ever there in the first place.
19 ljb (#) Aug 22nd, 2013 - 05:48 am Report abuse
What happened to the much publicised Latin American unity?
20 ManRod (#) Aug 22nd, 2013 - 05:51 am Report abuse
“Latin American Unity” between leftish ”governments... but never with serious, responsible and treaty-respecting states.

Long live the Falklands!
21 Anglotino (#) Aug 22nd, 2013 - 06:01 am Report abuse
@15 Redrow

Interesting point you make. I didn't see the connection this poem until you said that:

First they came for the communists,
and I didn't speak out because I wasn't a communist.

Then they came for the socialists,
and I didn't speak out because I wasn't a socialist.

Then they came for the trade unionists,
and I didn't speak out because I wasn't a trade unionist.

Then they came for me,
and there was no one left to speak for me.

Someone who doesn't speak out when they know something is not right has an extremely bad historical precedents.
22 Furry-Fat-Feck (#) Aug 22nd, 2013 - 07:10 am Report abuse
21 Anglotino (#)
Aug 22nd, 2013 - 06:01 am

I have shamelessly nicked this post.
23 Don Alberto (#) Aug 22nd, 2013 - 07:13 am Report abuse
Toby Big Nostrils write: “ultimately I have to give the benefit of the doubt to the argentine side over the foreign side.”

Yeah, right, 'Recht oder Unrecht, mein Vaterland” as the good old Nazis said.
24 Anglotino (#) Aug 22nd, 2013 - 07:37 am Report abuse
@22 Furry-Fat-Feck

They are not my own words, but those of pastor Martin Niemöller.
25 Furry-Fat-Feck (#) Aug 22nd, 2013 - 07:43 am Report abuse
Good words.
26 The Chilean perspective (#) Aug 22nd, 2013 - 07:54 am Report abuse
Well CFK and the Campora want a domestic airline monopoly. This is not surprising, in fact they seem to be moving in a very predictable way towards government control over economic activity. Unfortunately the big losers will be the Argentine public, too bad for them. As for LAN it's been impossible to get their profits out of there lately so I guess it's time to call it a day. They can return when someone else is running the place, even though I wouldn't want my money invested there NO matter who was president. Their planes will easily be absorbed
servicing other Latin American capitals, there's plenty of them not serviced right now. At least they will be able to redeem their earnings . Also investors will take note and inflows to Argentina will continue to decrease, better for us more serious types as we'll get bigger slices of the ever decreasing FDI pie.
Besides CFK doesn't really care since she said today that Argentina's economy is more solid than Canada's or Australia's.
27 Conqueror (#) Aug 22nd, 2013 - 08:15 am Report abuse
Shouldn't be a real problem for LAN/LATAM. In fact, I find it hard to believe that there are argies with enough money to afford airline tickets. But a look at a proper map, i.e. not an argie one, reveals that there are few problems with routing. For example, the route to the Falkland Islands from Chile simply involves taking a route south of the continent. LAN/LATAM has sufficient aircraft with enough range for such a route. To the north, a route across Bolivia and Paraguay leads to Brazil. I doubt Bolivia would want to upset Chile, Peru, Paraguay and Brazil. Even if it did, LAN/LATAM could simply go on to Peru and then cross into Brazil. LAN/LATAM could even consider a once-a-month flight to Uruguay. Just cross argieland off the list of “destinations”. And think seriously about whether argie passengers should be allowed on LAN/LATAM aircraft. And don't permit Aerolineas Argentinas to land in Chile!
28 Mr Ed (#) Aug 22nd, 2013 - 09:06 am Report abuse
@21 they are the Communists, in all but name, and they are coming for everything that they can get.

@27. Do let AA 'planes land in Chile, those hedge funds might want to sell them for scrap.
29 Faz (#) Aug 22nd, 2013 - 09:43 am Report abuse
#12 ...speaking with all the authority of a C grade burger flipper.
30 Simon68 (#) Aug 22nd, 2013 - 09:57 am Report abuse
12 The Truth PaTroll (#)
Aug 22nd, 2013 - 12:33 am

Tobias, you said: “... While I don't particularly enjoy or even agree with this measure, ultimately I have to give the benefit of the doubt to the argentine side over the foreign side.”

Lan Argentina is an Argentine company, paying taxes in Argentina and employing around 3.000 Argentines, so to who you are giving the benefit of the doubt?????????????
31 Condorito (#) Aug 22nd, 2013 - 10:02 am Report abuse
I do feel a little sorry for them floundering the way they are. I mean having to watch on hopelessly while little Shile mops up most of the continent's airlines and eats up their domestic market must hurt those fragile Argie egos some. ... but the course of action they have undertaken will only make their problems worse.

As The Chilean perspective @26 points out, the losers will be the Argie public (and tourists), while the damage to LAN will be minimal.
32 GFace (#) Aug 22nd, 2013 - 11:40 am Report abuse
So LAN puts $5mill into the joint, have a contract through 2023 and CFK's thieving fascist brownshirts who are running Latams “competitor” into the ground want it all. Make deals with Argentina, be prepared to play the sucker.
33 cornelius (#) Aug 22nd, 2013 - 12:18 pm Report abuse
Are the people in Argentina so docile how can they take this abuse for sure they talk a lot and they do nothing paraguayan's do not talk but they act they got their contry back from the lefties bastards.
34 reality check (#) Aug 22nd, 2013 - 12:36 pm Report abuse
LAN executives must have the patience of saints, they are constantly being ferked from pillar to post. My guess is something will be arranged (probably involving yet more money, dollars US) and they will remain there.
35 ChrisR (#) Aug 22nd, 2013 - 12:37 pm Report abuse
The Bitter And Twisted Old Twat Of Chew Butt's paradise:
36 Anglotino (#) Aug 22nd, 2013 - 04:24 pm Report abuse
@26 The Chilean perspective

“Besides CFK doesn't really care since she said today that Argentina's economy is more solid than Canada's or Australia's.”

Huh! Really?

37 Islander1 (#) Aug 22nd, 2013 - 05:06 pm Report abuse
Lan Argentina of course being the only competent reliable trustworthy
airline in Argentina anyway - no wonder the Campora mob want them out!
Yes Chile will be wringing their fingers but that it the price they pay for having such a soft wet naive supine foreign policy towards Arg for so many years - it started with the gas deal!
38 Casper (#) Aug 23rd, 2013 - 01:15 am Report abuse
@33 Cornelius

MagnusMaster's posts offer some interesting insights on the issues you raise.
39 Ayayay (#) Aug 23rd, 2013 - 03:20 pm Report abuse
Real question, you guys? Are there other airliat leave Argentina if LATAM pull out? i guess United only canceled one flight...And Ezezia still has non-gov airline visits?

To me this looks like a gradual ok, fast closing of the borders.
40 Pete Bog (#) Aug 23rd, 2013 - 04:27 pm Report abuse
@26 The Chilean perspective
“Besides CFK doesn't really care since she said today that Argentina's economy is more solid than Canada's or Australia's.”

She might want to visit Australia!!!-They look a lot more sorted than Argentina, are supplying China-but without China controlling them.
Well more evidence to suggest it will benefit Argentina's opponents/competitors if CFK stays in power.
41 reality check (#) Aug 23rd, 2013 - 07:11 pm Report abuse

They are now saying they only want the hangar, they do not need to stop flying!

42 ManRod (#) Aug 24th, 2013 - 05:16 am Report abuse
“they only want the hangar” despite signing contracts that they would want it till 2023? Same as “they only want more money”, 18 million on top for intercargo for the ground services, despite having a contract till 2014 and having payed all before (32 millions) ?

The more time passes, the more I think it's really endemic in Argentina to be honourless and thugs. The density of such acts is astonishingly high, so I am fearing that it is really a idionsincracy of the whole nation, while few weeks ago I only blamed it to the corrupt governments. Why do people keep voting them and do not push them from their “golden throne” ?
43 The Chilean perspective (#) Aug 24th, 2013 - 08:02 pm Report abuse
I've been reading more comments on Argentine papers and it seems that they are split on this dishonest manoeuvre by the Argentine authorities.
I for one rather like this move by CFK and her son, I only hope that it doesn't hurt them too much politically. The most important thing from a Chilean self interest perspective is the continuation of the steady downward spiral that the Argentine economy and institutions are on. Hopefully it wont lead to an implosion, just the weakening and eventual relegation to Venezuela like standards. This would be enough to ensure the survival of our model who would come under extreme pressure if the populist/ peronist model showed any kind of success. I know this sounds selfish and perhaps a little paranoid but Chile is full of leftists who would destroy all that has been built in a heart beat if given the chance. This is why having a neighbour state tittering on the abyss, and going from crisis to crisis is necessary.

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