MercoPress. South Atlantic News Agency

Aerolíneas interested in Pluna

Aerolínas Argentinas and Varig airlines signed last week a letter of intent allowing the former Argentine airline, now under Spanish control, to audit Pluna's books the first step for the possible acquisition of the 49% share of the Uruguayan flag carrier which belongs to the Brazilian airline.

Aerolíneas sources indicated that the company is interested in expanding regional operations in Chile and Uruguay, and has 45 to 60 days to decide whether it will go ahead and purchase Varig's share in Pluna.

Aerolíneas Argentinas now under the control of the Spanish group Marsans closely linked to the tourism industry reported earnings of 44 million US dollars in 2003, a 156% increase over 2002, and has plans to invest 192 million US dollars in 2004.

In mid February Aerolíneas CEO Spanish born Antonio Matta confirmed the company's interest in the Uruguayan market adding that "they (Varig) are interested in selling and we're interested in buying; from then on we'll see what they have and then decide".

Pluna has a 52% share of the profitable Montevideo-Buenos Aires shuttle and together with Varig dominate 60% of all Uruguayan air traffic, passenger and cargo.

Pluna a former government airline became a joint society with private investors in the mid nineties. The Uruguayan flag carrier has an annual turnover of 60 million US dollars, 500 employees and flies to Chile, Argentina, Spain, several Brazilian cities and Paraguay.

The current possession of Pluna is divided between Varig, 49%; the Uruguayan state 48%; private investors 2% and the company's staff 1%.

The estimated value of Varig's share according to Argentine sources is between 25 and 30 million US dollars.