December 21, 2013
TIMERMAN IN CHILESaturday, August 24, 2013
‘LAN will not leave country’
Foreign minister meets with his Chilean counterpart in Santiago
The federal government is confident that LAN Argentina, part of the LATAM Airlines Group, will continue operations in Argentina. He said the company should hold talks with regulators, after having received this week an eviction notice to leave its hangar at the Metropolitan Airport in Buenos Aires.
“We are sure that LAN is going to continue operating in Argentina in accordance with the rules established by the authorities,” said Foreign Minister Héctor Timerman, after a bilateral meeting in Chile. “I am certain the company will stay in Argentina. LAN will resolve its problems by talking with the relevant authorities.”
The National Airport Agency (ORSNA) has given LAN 10 days to vacate its hangar at the Metropolitan Airport in Buenos Aires, where it carries maintenance on a dozen Airbus A320s that fly 14 domestic routes in the country.
The notice sent to the company states that the government offered to help move LAN’s domestic flights to Argentina’s main international airport in the suburb of Ezeiza, an offer it said the company refused.
Timerman was in Santiago de Chile where a meeting at a Cabinet-level was held between the two governments. Timerman met with Chile’s Foreign Minister Alfredo Moreno and discussed the LAN situation.
“This is not a problem between Argentina and Chile. This is a problem between a company and its regulators,” Timerman said. “Chile’s interests are Argentina’s interests and vice-versa.”
Moreno also expressed the need to reach an agreement and said that the solution “is to talk over the problems and reach a solution.”
“Timerman and the Argentine regulators (ORSNA) have collaborated with us over this issue. We are working on solving it without harming Argentina, LAN or Aeroparque,” Moreno said. Chile’s Economy Minister Felipe Larraín was more critical and hoped that the “non-discrimination agreement between local and foreign investment is respected.”
While the meeting was being held in Chile, LAN employees staged a protest at ORSNA’s office in the Metropolitan Airport to complaint about possible job losses. Protesters blasted ORSNA’s President Gustavo Lipovich and brandished signs that said “we are Argentines, we want to work.”
Concerns were expressed yesterday also at Iguazú Falls, one of Argentina’s main tourist destinations that currently receives 19 LAN flights a day. Iguazú’s Tourism Agency (ITUREM) sent a note to the national Tourism Secretariat to explain the problems that the cancellation of LAN flights would bring.
“LAN is more flexible than other companies to increasing its number of flights,” Claudio Álvarez, head of ITUREM, said. “The company carries a big number of passengers and I don’t know how else they could arrive here.”
A possible legal action
LATAM, formed in a merger last year between Chile’s LAN and Brazil’s TAM, has said the action puts its domestic Argentine operations at risk and has threatened legal action. The federal government’s decision came shortly after the company announced a quarterly loss of US$330 million due to currency fluctuation in Brazil, and it was fined US$1 million by Canada in a price-fixing case involving South American cargo shipments.
LATAM shares plunged 10 percent before recovering some lost ground on the last few days, but they still have lost more than half their value in the year since Chile’s LAN Airlines and Brazil’s TAM Airlines merged. The company’s investments-grade debt ratings were lowered after the LAN takeover, taking away much of the robust financial position the company had before the merger.
Herald with DyN