Court sides with LAN Argentina in hangar dispute

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A Buenos Aires court has supported a temporary legal decision from September that prevented Argentinean airport supervisor ORSNA from unilaterally terminating a lease contract on LAN Argentina's maintenance hangar at Buenos Aires Aeroparque airport.

Last August, the Argentinean government had published through ORSNA an order to expel LAN from its Aeroparque hangar, after which LAN questioned the viability of continuing its operation in the country, suggesting the potential loss of 3,000 jobs.

In September, a temporary court order prevented ORSNA from executing an already published eviction order, giving the court six months to take a final decision.

Now the second chamber of the Federal Administrative Court of Buenos Aires has confirmed the previous ruling, allowing LAN to continue using the hangar in the terms of the existing contract. It rejected ORSNA's defense of "superior public interest" over the use of the land of the hangar in a major airport remodeling project.

Local observers considered the move as an attempt to improve the financial situation of loss-making, state-owned Aerolineas Argentinas by eliminating its main competitor, LAN, from highly congested Aeroparque airport.

LAN holds a 28% domestic market share in Argentina and serves 14 local destinations.