Monday, May 20, 2024

ARGENTINA | 10-01-2024 15:48

Cutbacks at Aerolíneas Argentinas: Milei government slashes management

Management of loss-making flagship carrier cut by 43% as part of “streamlining plan” for state airline introduced by Milei administration.

President Javier Milei’s government has introduced large cutbacks at state airline Aerolíneas Argentinas, reportedly slashing its management positions by more than 40 percent.

The changes at the flagship carrier were announced by Infrastructure Minister Guillermo Ferraro in an official release. According to the statement, the number of managers at the firm has been reduced by 43 percent compared to staffing levels last month, down from 14 to only eight. 

“In order to endow the company with greater functionality, the eight managers who starting now will be part of the new organic structure of Aerolíneas Argentinas will be: Press and Institutional Relations, Legal Affairs, Economic and Financial, Commercial, Human Resources, Technical and Fleet, Operation Coordination, and Aerial Policy and Corporate Services,” a document specified.

In parallel, direct reports to the company’s general management were also reduced. These actions, according to the Ministry, are part of a “comprehensive streamlining plan” which seeks to optimise the airline’s operational structure, amid a policy of reform and reduction of the State aimed to be developed by La Libertad Avanza’s administration.

“The government is moving forward with the promised measures of reduction and efficiency of public expenditure, one of the main objectives of President Javier Milei,” concluded the release.

Aerolíneas Argentina last year transported a record-breaking number of passengers with more than 13.8 million flying with the state-run company. That figure overtook the 12.9 million recorded pre-pandemic in 2019.

In the domestic market, nearly 11 million travellers took flights, with 1.8 million travelling within the region, particularly to Brazil, with  the United States, the Caribbean and Europe also recording growth. In all, the company averaged 84 percent occupancy on its flights.

Aerolíneas Argentinas is one of the state-run companies named by Milei that he intends to privatise. He previously said he would authorise a handover of shares — likely to employees — and has moved to free up the nation’s air-travel industry.

Regulations allowing the sell off of the state carrier are among those up for debate in the recent Omnibus Law presented in Congress last December. The reforms are “aimed at generating more competition and economic efficiency, reducing the tax burden, improving the quality of services, promoting private investment and professionalising company management,” said the government earlier this month.

Previous governments have spent hundreds of millions of dollars a year to prop up Aerolíneas Argentinas, which has heavy debts. Between 2008 and June 2023, the state pumped in more than US$8 billion to the company, according to a report by Bloomberg Línea.

As of June 2023, commercial and financial debt amounted to just over US$600 million, a curve that has been declining since 2019, when liabilities reached US$1 billion.




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