MercoPress. South Atlantic News Agency

Spanish group definitively decided to abandon Argentina

The Spanish group Marsans expects to finalize this week an agreement to sell Aerolíneas Argentinas and its subsidiary Austral to the Argentine government according to company sources in Madrid.

Marsans tourism group owns 94% of Aerolíneas and 97% of Austral and has "definitively decided to abandon Argentina", which confirms insistent rumors in Buenos Aires that the President Kirchner administration was drafting a bill to take over the Argentine flag air carrier which was nationalized in 1991 and has since been in Spanish hands, first under Iberia and SEPI and from 2001 with its current owner. According to press reports both in Madrid and Buenos Aires Marsans decision to divest from both airlines is "irreversible", but the price of the shares and how to harmonize the whole operation is still waiting to be determined. On Monday Argentine officials met with Aerolineas representatives and with a special envoy from the Spanish businessmen Gonzalo Pascual and Gerardo Díaz Ferrán who own Marsans besides the fact they are leading members of the Spanish Industry and Commerce Chamber. The idea of gradually making Aerolíneas more "Argentine" was launched last May when the Kirchner administration sponsored the incorporation of an Argentine private associate to the company in the framework of Argentina's current policy of recovering privatized corporations currently under foreign control back to the Argentine private sector, preferably. Such has been the case with several public utilities and lately YPF. Marsans signed then a letter of intent to sell 36.4% of Aerolineas to the Argentine businessman Juan Carlos Lopez Mena and 25% to the Argentine government which would then be split among the federal and provincial governments plus company's staff. But the deal fell through last week when Aerolineas personnel stopped flying, claiming June's unpaid salaries and the company revealed it had lost 150 million US dollars so far in 2008. Last Thursday the Argentine government and five of the seven unions of Aerolineas appealed before Court for a judicial caretaker to be named in the company to help normalize operations. In the meantime the Argentine government provided funds to pay for salaries, fuel and the lease of half the fleet which was to be grounded, thus helping the two airlines to normalize operations. However company sources in Madrid insist the Argentine government blocked negotiations for credits with the Argentine banking system plus filtering news that the airline had mounting debts of over 900 million US dollars, mostly with the government and the local affiliate of Repsol, YPF for fuel.