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Tuesday July 22, 2008

Argentina moves to buy Aerolineas Argentinas and Austral from Spanish group

BUENOS AIRES, Argentina (AP) - Argentina's government signed a deal Monday to purchase Aerolineas Argentinas and its subsidiary Austral from a Spanish travel conglomerate for an undisclosed price.

The company, which was privatized in 1991 and is struggling amid financial woes and labor conflicts, returns to the hands of the state burdened with an estimated US$900 million debt, Argentine President Cristina Fernandez said.

"I would have liked it if those who acquired the company could have advanced a successful operation,'' Fernandez said.

"But the need to keep connecting our cities has forced the national state to make this decision to guarantee service and the existence of our flagship carrier.''

The agreement signed with executives from Spain's Grupo Marsans delivers control over the two airlines to the government within 60 days, Fernandez said.

Congress must approve the deal first.

The two carriers together account for about 85 percent of domestic air traffic.

Aerolineas Argentinas has seen frequent conflicts with labor unions over the years, and recently has been plagued by cancellations and delays.

Fernandez issued a call to resolve the disputes and rebuild the airline.

"Our goal must be to return to the customer the Aerolineas of old,'' Fernandez added.

"This can't be done by the president, lawmakers or judges. Getting the flights to take off and arrive on time is a task that only its workers can accomplish.''

Latest business news from AP-Wire

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