More than a decade ago Latin American nations privatised their flag carriers, but their love affair with government-owned airlines lingers.

State-owned airlines still serve various government goals. In Argentina, they are a device to keep the staff of defunct airlines working. First it was Lafsa, formed to employ crews from grounded LAPA and Dinar. It never lifted off on its own, but privately-operated Southern Winds employed Lafsa’s staff under government subsidy until other problems halted Southern Winds. Now that LAN Argentina has absorbed Lafsa’s employees, Buenos Aires is thinking of starting a new state-owned airline, this time to employ the staff of Southern Winds.
In Venezuela, government-created and owned Conviasa is a sovereignty symbol, designed to rekindle national pride that President Hugo Chavez thinks was sullied when Viasa, the former flag carrier disappeared in bankruptcy. The government is so keen to restore Viasa’s image that prosecutors seek to declare its bankruptcy fraudulent.
That will not bring back Viasa, but it helps explain why the government has abandoned earlier assurances that Conviasa would only operate routes too marginal for commercial carriers. Now it is taking a half interest in Uruguay’s Pluna and wants the carrier to fly from Caracas to Madrid and the USA. Uruguay’s Government brokered the deal allowing Brazilian carrier Varig to sell its 49% shareholding to Conviasa.
In other countries, government-owned airlines owe their continuing existence to the armed forces. Even though civilians control aviation, military commanders still have their say. Hence, the fortunes of air force-operated airlines are a good gauge of military influence.
By this measure, it is declining in Peru and Colombia. Air force-operated TANS grew when strongman Alberto Fujimori was Peru’s president. Since progressive Alberto Toledo replaced him, TANS has been on the defensive.
Civil aviation authorities grounded it in January, citing a series of safety concerns, and Lima has been debating its future ever since. The latest signs are that TANS will gain a reprieve, but only after its wings are clipped.
According to local reports, it will be forced to withdraw from most routes served by commercial rivals and return to its roots – missionary routes in Peru’s Amazon.
Colombia’s Satena also faces challenges. It and TANS share similar histories – flying jungle routes as a public service and a training exercise for air force pilots. But as commercial carriers have extended their networks into the hinterlands, its missionary role has shrunk along with its subsidies.
Now, despite stiff opposition from commercial rivals, Satena seeks authority, mainly as a way to raise revenue, to fly into neighbouring countries. If AeroCivil agrees, it may save another military airline that has fallen out of favour. ■


Source: Airline Business