MercoPress. South Atlantic News Agency

Argentina takes over flag air carrier from Spanish group

Mrs. Kirchner recovered national pride or a poisoned chalice

Argentina's Senate voted on Wednesday night the nationalization of flag air carrier Aerolíneas Argentinas, privatized 18 years ago and lately managed by the Spanish group Marsans.

The 46-21 vote in favor of the takeover of Aerolineas Argentinas and Austral airlines was the final step in making the nationalization law. Argentina's lower house in August approved the measure, which requires the state hold a majority of company shares. In accordance with the law, the Argentine government will pay a sum that will be established by a special court authorized by Congress. The debt strapped airline, according to the company's unions has a burden of 900 million US dollars. Lawmakers modified the original government bill, showing greater initiative in the aftermath of a mid-July Senate vote that quashed a government proposal to raise taxes on soy exports -- a proposal that sparked a four-month farm revolt. That vote was a major political blow to President Cristina Fernandez de Kirchner, whose popularity sank during the farm conflict. Mrs. Kirchner said the state had no choice but to buy out Marsans because the heavily indebted airline was behind on salary payments. Aerolineas and Austral operate 80 percent of domestic flights and employ some 9,000 workers. Aerolineas Argentina was on the verge of bankruptcy in 2001 when Marsans bought it from a group controlled by the Spanish government. The company was first privatized in 1990, according to the airline's Web site. Argentina's Air Transportation Secretary accused Marsans last month of "draining" Aerolineas and said he did not think the government should have to pay anything for the airline. However the Spanish group has insistently argued that the company had to endure since 2002 (government) frozen air fares, rising costs and permanent labor conflicts sponsored by the unions, one of them led precisely by who was named Air Transportation Secretary under the administration of former president Nestor Kirchner. The Kirchner administrations have been openly pushing for the recovery of what they consider emblematic public services or utilities such as YPF (oil), post office, water services and why not the country's flag air carrier.