MercoPress. South Atlantic News Agency

Argentine gov. planning to take over Aerolíneas

The Argentine government has plans to intervene in the administration of the country's largest airline and flag carrier Aerolineas Argentinas, which has been hit by a series of labor disputes, Buenos Aires media reported on Wednesday.

Daily La Nacion said Transport Secretary Ricardo Jaime had presented a draft of the intervention plan to President Cristina Fernandez de Kirchner. The report quoted an unnamed official source as saying the process was "in motion." No one at the government or Aerolineas could be reached to comment since Wednesday is a national holiday in Argentina. A series of trade union disputes have affected the airline in recent months, causing flight delays and cancellations that have infuriated passengers. Private Spanish travel group Marsans holds a 95% stake in Aerolineas, but it agreed in May to reduce its stake to 35%. Under that deal, the Argentine government would hold 20%, a private Argentine businessman from the sea transport industry would take a combined 35%, company employees would hold 5%, and Argentine provinces the remaining 5%. Aerolineas Argentina was on the verge of bankruptcy in 2001 when Marsans bought it from a group controlled by the Spanish government. Together with Argentine airline Austral, Marsans handles more than 80% of Argentina's domestic air traffic. The Argentine airlines pilots association, APLA, Jorge Perez Tamayo is quoted saying that "if there's not a quick change in the handling of the company, there will be serious problems". He added that Aerolíneas is facing a financial "suffocation" and if the lease on the aircrafts is not paid by next Friday, "60% of the fleet of Aerolíneas cease to fly". Aerolíneas and Austral passengers have been exposed to flight delays and cancelling because of constant labor strife. Allegedly the latest protest is over the non payment of June salaries. However the company promised to deposit the funds on Thursday. Aerolíneas reportedly lost 100 million US dollars during the first half of the year. The current situation coincides with the winter holidays in Argentina when domestic flights are usually packed with domestic and foreign tourists.