MercoPress. South Atlantic News Agency

As Aerolineas turns Argentine, air fares again hiked 18%

Argentina increased 40% the airflight rates in a month

Argentina's government authorized a new hike in domestic air rates to the tune of 18%, just a month after a similar increase to help airlines face the soaring cost of fuel.

The new rates also happen when an Argentine businessman in discussing the purchase of a stake in the country's main domestic air carrier, and flag carrier, Aerolineas Argentinas which is currently under majority control of the Spanish tourism operator group Marsans. The Spanish group recently announced its intention of giving up a percentage of the company which has faced increasing operational difficulties in Argentina. Marsans owned 95%, and last week handed 15% to the Argentine government which saw its share increase to 20%. The plan which has also been described as the "Argentinization" of Aerolineas Argentinas, --and is sponsored by President Kirchners administrations--, includes 10% for the company's staff and provincial governments and the rest is to be split with an Argentine businessman linked to the tourism industry with his ferries that regularly cross the River Plate linking Buenos Aires with Montevideo, Colonia and Punta del Este in Uruguay. Juan Carlos Lopez Mena and Marsans are currently involved in discussions as to who will hold the majority of the remaining 70%. Lopez Mena has publicly announced he will only accept joining the company if he has control of a 35% plus stake. Although Marsans has adopted a low profile attitude during negotiations, Spanish authorities have expressed concern about how Spanish corporations are being treated in Argentina. The latest was in Lima during the recent EU/Latam leaders' summit meeting where Spanish president Jose Luis Rodriguez Zapatero brought up the issue with Cristina Fernandez de Kirchner during a private meeting. Argentina's domestic air market is dominated by Aerolineas which holds a leading 80%, while the Argentine branch of Lan Chile manages the rest.