The Spanish tour operator Marsans Group, who was the main shareholder, would stop running the company due to pressure to abandon the business. Marsans and the Government should discuss the price of the stocks and the way the transaction will be conducted.

The company says that Aerolíneas has a matured debt of 200 million dollars; however, the Government considers such debt as part of a future transaction: the payment for the rental of the airplanes, resulting in liabilities accounting for around 800 million dollars. In the case of Austral, the process is more accessible since it was declared insolvent and it is worth around 400 million dollars. The Group Aerolíneas Argentinas is formed by:

• Aerolíneas Argentinas
• Austral Líneas Aéreas
• Jet Paq (domestic and small cargo company)
• Aerohandling (ramp handling services for Aerolíneas Argentinas and Austral Líneas Aéreas)
• Aerolíneas Argentinas Cargo

Austral Líneas Aéreas is a block of shares controlled totally by Marsans. Between 2004 and 2007, Aerolíneas Argentinas had a subsidiary in Chile called Aerolíneas del Sur. After this measure, Marsans decided to rebrand the company to Air Comet Chile.

By taking this measure, the current Argentine Administration intends to nationalize another public service, as it did with the postal, water and train services. The Executive Power has considered submitting to the National Congress a bill for nationalization. According to the Spanish party, the agreed funding was stopped despite receiving the fare increase authorized by the Government.

Banks asked for a higher level of guarantee, since what the Iberian Group offered was not enough. As a result, Aerolíneas was out of cash flow to meet the payroll, and the Argentine Government came out in their defense; strikes were called and many flights were cancelled. This was the second increase in the year, and ticket prices raised almost 40 percent.

If we take this increase into account, and also the dramatic 150%-increase produced in August 2006, the Aerolíneas Argentinas air fare for certain routes are extremely high in relation to the international fares, so in this way the Argentine tourism loses its competitive edge and gets more expensive every year.

Since 1990 up to now… worse and worse
In 1990 Aerolíneas Argentinas changed its corporate name, went from a State-Owned Company to a Corporation (ARSA); afterwards it was sold to the Spanish government that joined it to Iberia (which acquired an 85% stake of the company before its privatization).

The airplane and the remaining assets such as the headquarters in Paris, New York, Los Angeles, Rome and Frankfurt were sold. The company before being transferred to the Spanish government had total assets close to 700 million dollars. Then the Spanish government incurred a massive debt, and the airline stopped realizing profits.

Iberia bought from Aerolíneas Argentinas two 10-year old Boeings 707 for an incredible price of 1.57 million dollars each. The dreadful administration of Iberia gave origin to 1994 bankruptcy, so Aerolíneas shares went to the Holding Group of State Industrial Companies (Sociedad Española de Participaciones Industriale) pertaining to the Spanish State.

Aerolíneas merged its operations with Austral Líneas Aéreas. At the end of the 1990s, the Spanish government tried to sell the shares to American Airlines with no luck at all. Spanish inefficiency led to flight cancellations to seven international destinations and the airline summoned a creditors’ meeting by mid-2001.

At the end of 2001, the control of Aerolíneas Argentinas and Austral was transferred to Air Comet, a consortium controlled by private-Spanish airlines Spanair and Air Comet as well as the tour operator Marsans, which acquired more than 90% of the shares.

Despite being about to cease operations in 2001, because of Iberia’s dreadful administration together with the airline crisis owing to September 11th terrorist attacks in New York to the Twin Towers and the Argentine crisis, the company recovered due to Grupo Marsans’ capital contribution (50 million dollars).

In 2002, Aerolíneas Argentinas suspended the creditors’ meeting thanks to the legal acceptance of the debt restructuration. At the beginning of the 1990s, Aerolíneas owned 43 airplanes, now it has only one.

In those days the airline did not have rented aircrafts; today all the airplanes are rented. This shows the clear asset stripping process that occurred in the last 25 years. It is time Aerolíneas became the same airline as it initially used to be for the good of the tourism in Argentina.