MercoPress. South Atlantic News Agency

Lan Chile interested in Southern Winds

Chilean flag carrier Lan admitted it was holding talks for a possible purchase or association with Argentine airline Southern Winds.

Lan which already has operations in Peru, Ecuador and Dominican Republic and is considered one of the major Latinamerican airlines has been for years trying to penetrate the Argentine market so becoming the main carrier in South Cone.

In a short release the Chilean carrier said that Lan has "an invariable interest in accessing the Argentine market and has analyzed different alternatives such as an association with a local company; creation of a new company with local partners or an open skies policy". "In this context we're holding conversations with the Argentine government and also Southern Winds".

According to the Buenos Aires press Lan is interested in 70% of Southern Winds which is currently involved in a complicated legal and financial situation following the President Kirchner administration decision to cut its fuel subsidy for the company's alleged complicity in a major drug trafficking scheme.

Lan is interested in the Argentine domestic market since it already has regular flights to Buenos Aires, Rosario, Cordoba, Mendoza and Bariloche.

"When the interest materializes in concrete agreements the company will report details of the different instances", added Lan.

Lan Chile in 2004 managed historic earnings totalling 163 million US dollars and had previously tried purchasing another Argentine company, American Falcon, but the deal fell through given its precarious financial situation.

Southern Winds is currently under criminal investigation, with several of its top officials and owners questioned or arrested following the discovery last September of three unclaimed suitcases with sixty kilos of cocaine in Madrid Barajas airport.

The suitcases which travelled as non claimed luggage allegedly were addressed to the Argentine Embassy and were discovered by the Spanish police.

The apparently ongoing drug traffic which went unreported to President Kirchner led to the sacking of the Air Force commander in chief, plus several other high ranking officers including the administrator of Ezeiza airport and the creation of a new security agency to keep control of airports. Traditionally air terminals in Argentina were under Air Force responsibility.