MercoPress. South Atlantic News Agency

Decisive week for Aerolineas Argentinas control dispute

Argentina's Transport Secretary scoffed at the assets valuation by a Swiss bank of the Argentine flag carrier Aerolineas Argentinas which was recently re-nationalized and is embroiled in a dispute with the Spanish group that until a few months ago controlled the airline.

Aerolineas and its subsidiary Austral were appraised by Crédit Suisse at an estimated 350 million US dollars, which Secretary Ricardo Jaime downplayed as extremely inflated. "If that's what they (the airlines) are worth then I'll request Crédit Suisse to appraise my house in Caleta Oliva (Santa Cruz province) so that I can sell it and buy an apartment in Puerto Madero (an area of Buenos Aires city with some of the highest real estate prices in Argentina). We'll see if it (the appraisal) still stands on Tuesday (tomorrow)." The provisional agreement between the Argentine government and the Spanish Marsans group for the re-nationalization of the two debt-laden airlines expires Tuesday, when a shareholders' meeting will be held to approve their balance sheets. Secretary Jaime stated that, although the presentation of the Crédit Suisse appraisal "is not on the agenda meeting's agenda", in his opinion "it would be good to have it". Jaime went on to explain his incredulity at Crédit Suisse's estimate of the two ailing airlines' worth, saying that they had run an operating loss of 100 million pesos (33 million US dollars) in 2007; furthermore, their operating loss for 2008, up to July 17, amounted to 1,000 million pesos (333 million USD). He also pointed out that the two airlines were appraised by the Argentine Asset Valuation Court, presented to the Federal Planning Ministry on Friday, at a negative net worth of 600 million dollars. Secretary Jaime further stated that he found the Crédit Suisse valuation "suspicious," rejecting the opposition's demand that the two airlines be expropriated because "The law passed by Congress must be respected". Meantime it was revealed in the Buenos Aires press that two English solicitors' offices have been working on behalf of the Marsans group for a possible demand against Argentina because of the re-nationalization of Aerolineas. The case would be presented before the International Centre for Settlement of Investment Disputes protected under the Convention for the settlement of disputes between states by which Argentina and Spain abide. Marsans argues that since the 2001/02 Argentine meltdown air fares were frozen, the Argentine government allowed competitors on the same lines, subsidized other airlines and worsened economic conditions for Aerolineas.