Argentina orders denying air bridge services to LAN

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Argentina-owned ground handling company Intercargo has stopped providing Oneworld carrier LAN with air bridge services, claiming an additional payment is needed from the airline.

In a fax sent to Aeropuertos Argentina 2000 (AA2000), to which Flighglobal was given access, Intercargo communicates on 26 March the decision of Argentina's Ministry of Economy and Finance "to suspend air bridge services to LAN Argentina, LAN Airlines [Chile], LAN Peru and LAN Ecuador [...] because of recurrent payment issues". The suspension was made effective on 27 March.

No official comment was immediately available from LAN, but a local company source says that "LAN has a valid contract until March 2014, which has been unilaterally broken by Intercargo", adding that LAN is doing "all it can to reduce the hassle of remote boarding".

According to the source, Intercargo is requiring LAN to pay an additional $18 million for the remaining year of the contract, on top of the $32 million stipulated by the contract. The Chilean daily El Mercurio reports that LAN plans to take Intercargo to court for breach of contract.

While Aerolineas Argentina and its regional subsidiary Austral enjoy self-handling privileges, almost all other carriers are forced to contract handling services from Intercargo. Last year, the concession of the operation of the air bridges was transferred by a government decree from airport operator AA2000 to Intercargo.

Since the nationalisation of Skyteam carrier Aerolineas Argentinas in 2009, LAN, which is the national carrier's only major competitor, has already seen a number of route authority and new aircraft registration requests rejected by the Argentinean government in what has been generally interpreted as an attempt to protect loss making Aerolineas Argentinas from competition.

The Argentinean government had to inject in 2012 $915 million to keep Aerolineas Argentinas afloat. In 2011, the airline reported sales of $1.2 billion, which makes it one of the major airlines with the highest loss on sales in the world. Despite the increasing political and economical cost of the situation, Argentina's president Cristina Fernandez de Kirchner has repeatedly expressed her ongoing support for the airline and chief executive Mariano Recalde.