December 5, 2013
Recalde: Aerolíneas deficit is US$250M
Airline CEO says it marks sharp decrease from US$640 million loss in 2012
Aerolíneas Argentinas CEO Mariano Recalde and the performance of the state-run airline were placed under scrutiny in the Senate yesterday, with the La Cámpora leader estimating a US$250 million deficit for 2013.
Recalde considered the figure represents an improvement, as it “contrasts with the US$850 million (deficit) in 2011, which was a terrible year for the company.” In 2012, the company reported a loss of some US$640 million.
According to Recalde’s calculations, Aerolíneas will end 2013 losing US$684,932, or approximately four million pesos, per day.
Recalde’s appearance before the Senate’s Budget and Infrastructure and Housing and Transport committees came amid the government’s ongoing tensions with Chilean airline LAN over its metropolitan airport hangar, but Recalde emphasized that the session was arranged out of his own volition to detail the “evolution of the firm’s business plan.”
“In recent weeks there has been a lot said about a conflict to which Aerolíneas Argentinas is not a party, because it is between a private company and a government,” he said about LAN, adding that “there has been a bevy of lies that have been repeated in the media that are nonsense and many Argentines repeat as if they were objective truths.”
Recalde refuted comments from Buenos Aires City Mayor Mauricio Macri that the company was operating with a daily deficit of 20 million pesos arguing that he hopes to reach a “sustainable airline that not even Macri could privatize.”
Recalde emphasized that the state had taken over the airline with a negative net worth of “more than US$1,146 million” following “a series of private managements that left it on the edge of bankruptcy.”
Flanked by Victory Front (FpV) Senators Miguel Ángel Pichetto and Aníbal Fernández, Recalde described the management of the company as “super-professional.”
Pichetto vehemently defended the government stance that the state-owned airline needs to be “flying to non-profitable destinations,” but also argued that the Kirchnerite administration’s heavy subsidies toward the company were “the only way to own an airline,” as it would have disappeared “if we had followed the example of the Spanish,” in a direct reference to the Marsans group that ran Aerolíneas until 2008.
“If financing is needed to sustain connectivity until it becomes profitable, so be it,” added Pichetto, citing the three weekly flights to Viedma — the capital of Río Negro, the province he represents — as an example of Aerolíneas’ progress, noting there used to be only one flight a week there.
Radical Party (UCR) Senator Ge-
rardo Morales instantly replied: “We agree the airline should remain a public company beyond 2015, but not about flying to non-profitable destinations if doing so implies such a large deficit.”
Aerolíneas to spend more
Before the hearing, Recalde appeared on television and radio to defend the company, summing up the arguments he would later elaborate.
“We spend 12 million pesos per day on wages, that cannot be decreased, 10 million pesos per day on fuel, and we are going to spend more, because the more we fly, the more we spend on fuel and this would be a good sign of the public service and connectivity,” Recalde said.
Playing down the importance of his affiliation to Kirchnerite youth grouping La Cámpora, saying: “I am a member of La Cámpora. I am also a Boca Juniors supporter, but you can find every colour in the office, perhaps even those who do not vote for the government.”
Although he recognized that the airline’s “numbers can appear frightening when taken out of context,” Recalde emphasized he had asked to speak at Congress to “refute repeated lies and misinformation about Aerolíneas.”
Before commencing his meticulous criticism of Aerolíneas Argentinas’ management, Morales demanded Recalde’s apology for a recently disseminated video from 2010 of the CEO at a partisan rally, in which he described Morales and other members of the bicameral commission responsible for following up on Aerolíneas as a “bunch of drones.” Recalde is also seen calling Congressman Omar De Marchi a “disgusting agitator.”
Federal Peronist Liliana Negre de Alonso considered Recalde had “defamed Congress” with his remarks.
“If at any time I was perceived to have affected the investiture (of Congress), I apologize,” but “you (Morales) should apologize” for having “called me corrupt and shameless.”
De Marchi strikes back
Following Recalde’s apology of sorts, De Marchi called for the Aerolíneas CEO’s resignation, describing him as shameless for saying “he had waited to be summoned by Congress when we have been summoning him for three years and he has refused to come and be held accountable.”
“Macri falls short when he says that Recalde and his friends spend 20 million per day,” the Mendoza Democrat party lawmaker said, adding that the “annual operational deficit surpasses US$800 million at the real dollar rate of 9 pesos. Aerolíneas loses 22.5 million pesos per day.”
Herald with DyN, Télam