President Javier Milei will sign a decree to facilitate the privatisation process of flagship state carrier Aerolíneas Argentinas.
The decision was announced by Presidential Spokesperson Manuel Adorni, who said the decree will speed up the ongoing congressional debate to declare the state-owned company “subject to privatisation.”
The decision came after the Milei administration announced it had opened negotiations with companies from neighbouring countries with the aim of operating Aerolíneas Argentinas' domestic flights.
“The President of the Nation is going to sign a decree declaring the company Aerolíneas Argentinas subject to privatisation, as is enabled by Article Nine of Law 23696, known as the State Reform Law,” said the official in his daily press conference at the Casa Rosada.
Once the decree is published in the Official Gazette, it will have to go through Congress to be dealt with. That process is expected to begin as soon as procedures will allow.
The announcement comes in the middle of a confrontation between Milei’s government and aviation unions, who have been staging strikes to demand improved pay.
Union groups reject the proposed sell-off of the state carrier.
“Aerolíneas Argentinas has a chronic deficit as a result of the disastrous management of each and every one of the populist governments, which causes the need for constant transfers of public resources that put fiscal sustainability at risk,” said Adorni on Friday.
“Since its nationalisation in 2008, the contributions of the national state have exceeded US$8 billion,” he added.
The national government is working on the transfer of the airline to the private sector, a desire Milei announced soon after taking office last December.
Adorni highlighted that the Argentine state owes more than US$340 million “corresponding to the sentence of the International Centre for Settlement of Investment Disputes (ICSID), an arbitration tribunal of the World Bank, due to the litigation initiated by the Marsans group.”
The spokesman stated that Aerolíneas Argentinas has “a staff of 1,204 pilots for 81 active planes, that is to say, there are almost 15 pilots for each operational plane, an absolutely excessive number compared to the industry.”
“If we compare the number of employees per aircraft of Aerolíneas Argentinas with other companies in the region, we can verify its oversizing. Aerolíneas Argentinas SA has an average of 125 employees per aircraft, while [Brazilian low-cost airline] GOL has 97 per aircraft and [Panama airline] Copa has 70,” he said.
For the La Libertad Avanza administration, the measure “aims for Aerolíneas Argentinas to operate under criteria of commercial efficiency and to generate an environment of competition on equal terms, deepening the freedom of markets, without this implying the loss of national sovereignty,” continued Adorni.
“The privatisation of the company and its operation under market conditions will allow for better service provision, care for the public coffers and, above all, for Argentines to stop financing the deficit of an inefficient company,” he concluded.
Milei initially attempted to include the firm in a long list of state firms to be sold off in his sweeping ‘Ley de Bases’ mega reform.
Privatisation is now back on the table following the backing of a new bill presented by PRO deputy Hernán Lombardi.
Court blocks decree
A labour court on Friday suspended a decree issued by President Milei on the grounds that it limits the right of aeronautical workers to strike.
The court granted the unions' request for an injunction to suspend the Executive branch's decree against strikes that have disrupted hundreds of flights and affected more than 30,000 passengers this month.
The decree declared aeronautical transport an “essential service,” requiring that at least 50 percent of services be provided in the event of a strike in the sector.
The labour court ruled that the move went against workers' rights, which are protected by the Constitution.
“We will respond to every illegality with greater conviction about the reasons for our claims,” the APLA airline pilots union said in a statement.
Earlier this week, the government authorised by decree the hiring of foreign crew and aircraft for domestic flights to counteract trade union measures.
The authorisation will come into effect in 60 days and allows foreign companies to cover flights within Argentina without registering their aircraft in the country.
The government also initiated talks with private airlines to transfer operations, Adorni confirmed.
The conflict began months ago over demands to recover wages in the face of inflation that reached 236 percent year-on-year in August.
Aerolíneas’ authorities have offered an increase of almost 11 percent, which has been rejected by the workers.
The International Federation of Air Line Pilots (IFALPA) this week expressed solidarity with the Argentinean aviation unions.
The state carrier’s management “lies, threatens, provokes and misrepresents data in order to discredit the demands of the pilots,’ it said in a statement.”
– TIMES/AFP/NA
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