MercoPress. South Atlantic News Agency

Aerolineas Argentinas CEO unceremoniously sacked

Aerolineas Argentinas CEO Antonio Mata was fired Monday for criticizing a recent “controversial” agreement by which the Argentine government recovers in two years 20% of the Argentine flag carrier, and for demanding an immediate increase in domestic air rates “if the company is to remain afloat”.

The Managing Council of Interinvest, the current proprietor of Aerolineas Argentinas and Austral in an official release from the Madrid headquarters announced Mr. Mata had been ceased in his post which would be covered by Gerardo Díaz Ferrán, the airline new CEO with the backing of Mr. Pacual Arias.

The release added that Diaz Ferran and Pascual Airas who hold 70% of Interinvest shares want to take distance from the latest statements of Mr. Mata regarding the recent agreement reached between Aerolineas Argentinas, Interinvest and the Argentine government, which "were expressed as a personal opinion and which we do not share and flatly reject".

Mr Mata's fate was cast when he revealed in a press interview that the recent agreement signed in Spain by President Nestor Kirchner for a greater share of Aerolineas involved 33 million Argentine pesos and that unless domestic rates were increased, "the company is doomed to failure".

Argentine Transport Secretary Ricardo Jaime denied any funds were involved in the operation to take over 5% of the company's shares, and insisted that the Kirchner administration "only talks and negotiates with the proprietors of Aerolineas, Interinvest".

"I flatly reject statements from Mr. Mata who in first place has spoken as former president of the air carrier", adding that Mr. Mata "is ignoring what was signed in Madrid; it's most clear that veto power remains with the Argentine government".

Mr. Mata who is credited for having recovered Aerolineas Argentinas in five years holds 30% of the company's shares through Interinvest but was forced out as CEO when he revealed that the "agreement in Madrid was a partners agreement, so if Argentina wants 5% of shares it will have to contribute with 33 million pesos, and if it wants 20% by next year, another 180 million pesos contribution will be needed".

"A greater presence of the Argentine government in Aerolineas is most satisfactory for all shareholders. We're most satisfied that the Argentine government is intent in taking a 20% share of Aerolineas", stated Mr. Mata referring to the agreement.

The former Aerolineas CEO said that the company's current value was 900 million Argentine pesos and if one of the associates, in this case the Argentine government, wanted to increase its share it would have to come in with fresh money. The long term plan also contemplates a public offering of 35% of the company's shares.

Mr. Mata also complained that because the increase in fuel costs can't be passed on to the airline tickets, "from a surplus in 2004, we're back in the red in 2005". He also blamed several industrial conflicts with pilots and mechanics "instigated by union leaders banned from any activity by the Argentine Anti Corruption Office". "Currently we're stuck with 2002 revenues but with 2006 costs", underlined Mata who argued that with no increase in domestic air rates, "we're doomed to failure".

The former CEO also rejected the proposal of fuel subsidies: "taxes are for social services; we must not look for profits on the back of subsidies of any kind". Finally he insisted the deal reached in Madrid was an associates' agreement limited to capital input and therefore, contrary to what was announced "the Argentine government has no veto power, under no concept".