Executives to go in Argentine rescue

Source:
This story is sourced from Flight International
Subscribe today »

Guy Norris/BUENOS AIRES Paul Lews/WASHINGTON DC

Aerolineas Argentinas' majority owner SEPI will present a new business plan to the Argentine Government to revive the financially ailing carrier. This follows SEPI's rejection of American Airlines parent AMR's restructuring proposal and the removal of key US national managers.

The airline's chief operating officer, David Cush, and chief executive, Diego Cousino, both former American Airlines executives, are leaving Aerolineas. Former general manager of Aerolineas' sister company Austral, Mario Sruber, is taking over the running of the carrier, while Cousino is retiring. Patricio Lagos remains as president. The move heralds the final merger of Austral and Aerolineas which is expected to be completed within two months.

Spanish state holding company SEPI will pump $70 million into the airline after dismissing AMR's buy-out. Full details of the rescue package will be announced in "30 to 40 days", says Aerolineas. SEPI holds a 42% stake in Andes Holding, which in turn owns 80% of Aerolineas' parent Interinvest.

Relations between Aerolineas' board of directors and the airline's US management have deteriorated following frustrated efforts at restructuring the carrier and a $150 million loss in 1999 (Flight International, 18-24 January).

A major problem for AMR was that despite acquiring a 10% stake in Interinvest in 1997 and taking over the management from Iberia, it was never allowed a seat on the Aerolineas board - a condition set by the US Department of Justice. AMR is expected to keep its stake in the carrier.

SEPI's long-term goal remains to dispose of its Interinvest holding, but it first needs to restructure Aerolineas and its large debts. With AMR failing to secure new investors, Continental Airlines is reported to be waiting in the wings.

The rescue plan calls into question the future fleet strategy of Aerolineas, an area of AMR's policy criticised by SEPI and Argentine interests. Top of the bill is the airline's proposed purchase of Airbus A340-600s, six of which are on order. Flight operations vice-president Juan Ardalla says options are being studied to drop all or part of the purchase in favour of more A340-300s.

Meanwhile, the Argentine government has suspended the open skies agreement with the USA to protect the national carrier. The agreement, due to come into force from September, calls for complete deregulation of traffic between the two countries by 2003.