MercoPress. South Atlantic News Agency

Kirchner after bigger stake in Aerolineas Argentinas

Argentina is considering acquiring 20% of Aerolíneas Argentinas stock currently under Spanish majority control, after having increased its participation from 1.5 to 5% this week, revealed Friday Argentina's Transport Secretary Ricardo Jaime.

"We're assessing the possibility of a 20% stake in Argentina's flag carrier", said Jaime in an interview in Buenos Aires, although no time table was announced.

Aerolineas Argentinas was privatized in 1990 and is currently under the majority control of the Spanish tourism consortium Marsans.

Last Thursday the Argentine government increased its share in AA from 1.5 to 5% following a voluntary cession by Marsans.

However if the Argentine government is intent in increasing its share to 20%, it will have to pay market price for equity.

The agreement reached Thursday with the Marsans group means Argentina will incorporate two representatives in the airline's board with veto power in some issues such as lifting flight routes.

Jaime announce that in the coming months a program will be implemented to recover the "operational capability" of the company and that one of the company's short term objectives will be to increase the number of aircrafts "from 44 to 70"

"This will enable Argentina's flag carrier to increase its operational capability domestically and in the region as the market is demanding", he added.

Jaime underlined that the new incorporations are scheduled for the first half of next year.

The Spanish group Marsans purchased AA for 615 million US dollars in 2001 from the Spanish Government Industrial Participation Society which controlled the company since 1990 when the air carrier was privatized under the administration of former president Carlos Menem.