Aerolineas Argentinas restructuring plan wins court approval

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JACKSON FLORES / RIO DE JANEIRO

Aerolineas Argentinas has left Chapter 11 bankruptcy protection after a Buenos Aires court approved its restructuring plan. The airline, which filed for Chapter 11 a year ago, has reached agreement with 324 of its 553 creditors to pay off $504 million of debt over the next two years. Its exit from Chapter 11 comes despite opposition from some of its remaining 229 creditors.

The restructuring plan calls for the Argentinian airline to pay 10% of the sum immediately, with a second instalment in December equal to 35% of its debt. The final tranche will come in December 2004, when Aerolineas will pay the outstanding 55%.

The airline posted a $5 million profit last month, and the bankruptcy court judge cited the airline's "clearly visible and serious efforts to financially improve its situation".

The airline has increased its domestic services since filing for bankruptcy protection, with its domestic market share rising from about 60% to 78%. It has also embarked on international market expansion by setting up a European hub in Madrid, and plans bases in Athens and Miami in 2003.

Meanwhile, Argentinian private carrier Dinar has won an important financial victory after the Banco de la Naci¢n agreed to free $15 million it was holding. The agreement will see 20% of Dinar's ticket sales retained to defray its outstanding debt. The deal will allow it to lease a second aircraft to add to its McDonnell Douglas DC-9 and reintroduce suspended services.