FIDAE: Aerolineas Argentinas defends financial health

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State-subsidised Aerolineas Argentinas says it is improving its financial performance, as the carrier seeks to distance itself from government-imposed protectionist measures in the past year that have often impacted competitor LAN Argentina.

Aerolineas president Mariano Recalde, speaking at the IATA Wings of Change conference at the FIDAE air show in Santiago, says the carrier is growing its revenue and load factors. While he does not provide specific figures, Recalde says the carrier is actively reducing its deficit.

The airline said last year it would receive 30% less in state subsidies in 2014, due to a projected 20% growth in passenger numbers this year. Recalde has said he hopes the carrier would be profitable by 2015.

Recalde emphasises that the airline's "social objective" is to provide connectivity for Argentinians and to operate to more destinations. He adds that the airline aims to make air travel more accessible for the country's citizens, who often perceive air travel as a mode of transportation for the affluent.

Argentina's government has come under criticism in the recent year for actions that observers view as protectionist measures to provide Aerolineas an advantage in its home country. These measures have appeared to target LAN Argentina, which is the country's second biggest domestic carrier with a 27% market share.

Earlier in 2013, LAN Argentina was threatened with eviction from a hangar it leases at Buenos Aires Aeroparque airport, after Argentinian airport regulator ORSNA told the airline to vacate the facility within 10 days. The airline was eventually allowed to stay, but the episode underscores the challenges faced by foreign carriers operating in Argentina.

Recalde seeks to distance his airline from such incidents, saying that Aerolineas' mission is "not incompatible" with LAN Argentina and adding that the carrier is not trying to drive its competitor out of business. "There is a fantasy that we hate each other, that we are enemies. We should put that down," he says.

LAN Argentina is a subsidiary of the LATAM Airlines Group. The group's chief executive Enrique Cueto says Aerolineas' privileged position in Argentina is a "reality" and that LAN Argentina still aspires to be a part of the country's market. "We want to be a part of that, with a minor participation and to have a share of the passengers," says Cueto.