By Marcela Valente and Tito Drago
BUENOS AIRES/MADRID, Oct 4 2001 (IPS)

At one of the darkest moments ever faced by the commercial airline industry, Aerolíneas Argentinas, acquired by a private Spanish consortium, seems to have been snatched from the verge of collapse, where it has been wavering for the past six months.

The deal turned out to be such good news that the unions representing Aerolíneas employees were wary of the buyer’s intentions.

The company’s transfer was announced in Madrid Tuesday by the group selling the company – represented by the state-owned Spanish consortium SEPI (Sociedad Estatal de Participaciones Industriales) – and the buyer, Marsans, a private consortium dedicated to air travel and tourism.

Aerolíneas Argentinas, which for the past six months has operated only 20 percent of its routes and which has 14 grounded airplanes, could begin to operate once again in the next few days. The airline’s employees, who are to begin receiving their paychecks next Tuesday, plan to lift their protest measures at that time.

The apparent resolution of the crisis plaguing Argentina’s flagship airline was a relief for the company’s nearly 7,000 workers, who have been living in absolute uncertainty for months, and saw on the horizon only an inexorable and imminent declaration of bankruptcy.

But the unions were cautious when it came to celebrating, saying they feared they were “falling into a new trap.” They stated, however, that they were pleased with Marsans’ announcement that the employees’ jobs would be guaranteed for two years and that they would be paid their August and September back wages.

The head of the union of the company’s mechanics, Ricardo Cirielli, and the representative of ground personnel, Ariel Basteiro, said they suspected that Marsans planned on taking over Aerolíneas’ routes and clients to turn them over to Marsans’ companies Span Air and Air Plus, which operate in Argentina.

More diplomatic but prudent nonetheless, the head of the association of airline pilots, Jorge Doyle, expressed his confidence that “Marsans will work for Aerolíneas Argentinas, instead of the other way around.”

The fears arise from the fact that Aerolíneas Argentinas, which was privatised in the early 1990s, was run for nearly the entire decade by the Spanish airline Iberia – still state-owned at the time – whose administration of the Argentine airline is being investigated by the justice system here on suspicions that its aim was merely to “gut” the company.

In less than 10 years, Aerolíneas Argentinas, which was turned over to Iberia debt-free by the government of Carlos Menem (1989- 99), fell 1.2 billion dollars in debt, saw its fleet shrink drastically, and lost a number of domestic and international routes.

The crisis reached its peak in the past few months, when SEPI attempted to dismiss personnel and suspended even more routes, triggering a tense period of protests and labour conflicts that could begin to calm down next Tuesday when workers are to receive their back pay and suspend their protest measures.

Edgardo Carreras, a legal adviser to the flight attendants’ union, told IPS that the reaction to the company’s transfer was halfway between optimism and apprehension regarding the future.

He urged the state to pledge that it would oversee the operation. “The agreement between SEPI and Marsans could work, as long as the [Argentine] state commits itself to closely monitoring the operation, in order to guarantee” compliance with the law that stipulates that 51 percent of the company’s shares must consist of national capital, he said.

Carreras said it was “very suspicious” that Fernando Doso, who will run the new Aerolíneas Argentinas, is the same person who arranged Iberia’s takeover of the Argentine airline in the 1990s, after which he managed it for 10 years. He now works for Air Plus, which belongs to Marsans.

Carreras added that the main objections raised by the unions concerned the lack of supervision of the financial movements involving Iberia’s injections of capital – some of which were never verified – into Aerolíneas, and the transfer of earnings to Madrid.

With respect to the timing of the deal, Carreras said it was not strange that during a time of crisis, there were companies keen on taking advantage of the hard times facing airlines due to the public’s fear of flying and subsequent cancellations of travel plans or choice of other means of transportation.

The present crisis facing airlines worldwide was sparked by the Sep 11 terror attacks in which hijacked commercial airliners were crashed into the World Trade Centre in New York and the Pentagon in Washington, D.C.

He also noted that many airlines had already found themselves in crisis prior to Sep 11, and said the attacks were merely the straw that broke the camel’s back. “They could have suspended employees for a few months until the fears passed, but they chose to lay them off instead,” he said.

The acquisition of Aerolíneas will enable Marsans to obtain fresh money in the short term – as passengers pay in cash -, attract passengers who are afraid to fly on US airlines (whose planes were involved in the Sep 11 hijackings), and negotiate new terms of payment with fuel suppliers and the owners of leased aircraft, who are unlikely to refuse at a time when the industry has hit bottom.

In Europe, Iberia’s president Xavier Irala announced measures Wednesday that will likely involve layoffs and cancelled flight routes, the Belgian airline Sabena’s payments were suspended Wednesday, and Swissair cancelled its flights Tuesday.

Sabena was in conflict with Swissair, which owns 49.5 percent of the airline’s capital and which recently announced that it would sell off part of that stake. The industry’s crisis hastened that process, and led to a suspension of payments by the Belgian airline, which could be accompanied over the next few days by a reduction in flights and downsizing.

Meanwhile, Swissair suspended its flights Tuesday, leaving its 76 planes and 18,000 passengers on the ground, mainly in the Swiss airports of Zurich and Geneva.

According to a company spokesperson, the decision arose from the fact that the airline’s fuel suppliers, British Petroleum and Shell, refused to make new deliveries because of the company’s bulky debts. Swissair owes more than 10 billion dollars, and is talking about laying off 7,000 employees in Switzerland alone.

Japan’s three airlines also lost around 90 million dollars in the 10 days following the attacks, while Air France lost 50 million dollars.

But not all airlines are suffering. This week the Chinese government approved a 1.5 billion dollar purchase of 30 Boeing 373’s, to add to the fleets of China Southern Airlines, China Eastern Airlines, Hainan Airlines and Shanghai Airlines.

The deal was good news for Boeing, which has been affected by the slowdown in Lan Chile, American Airlines, British Airways and Iberia.

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