Aerolineas Argentina

[CABJ]

Hopefully they will be soon 700 peso, atleast

 

[perry]

I am all for the Argentine state taking over Aetolineas Argentinas , Under private ownership it has been a disaster and greatly affected Argentinas image in the world. When it was government owned it was the pride of the nation. I agree with the comments on the first blog on the daily news which I have copied and pasted.
Cmmentators can bleat on about the fact that the airline is hugely
unprofitable, a reality that even the market was unable to address.
Under private ownership surely profitability is the only objective
that matters. But as a national company the state can offer a more
than just profitability as a reason to maintain the airline. The
airline represents Argentina and Argentina is not just about profit in
the private sector.

 

[bigbadwolf]

Commentators can bleat on about the fact that the airline is hugely unprofitable, a reality that even the market was unable to address. Under private ownership surely profitability is the only objective that matters. But as a national company the state can offer a more than just profitability as a reason to maintain the airline. The airline represents Argentina and Argentina is not just about profit in the private sector.

The large US carriers (Delta, AA) are hemorrhaging literally billions a year. It stands to reason that Aerolineas Argentinas will cost the government several hundred million dollars a year. It will plunge it even deeper into the red, and exacerbate inflationary pressures. Just for "national pride?"

 

[soulskier]

The national pride issue is an interesting take. I will admit the flight attendants are usually very attractive with their cute Argentine blue high heels.

 

[Stanexpat]

The argument for nationalization for national pride went out of fashion about the same time beetle boots and bell bottoms were the style. Today you can count on the fingers of one hand the countries in the world that have government owned airlines. The only other one in the the western hemisphere is Cuba(no surprise there). I saw a poll here where 80% of Argentines think the nationalization is a good idea. I am not surpised as a lot of people here tend to live in the past a lot of the thinking is 40 or 50 years out of date.The reason all the national airlines were sold off is simple. In most cases they were financial black-holes requiring more and more taxpayer money to keep them afloat.I will be shocked (assuming this deal goes through) if the government is still operating the airline in a year or two. Again my guess is this is just raid on the public treasury with the intend of lining the pockets of friends and cronies.

 

[Fishface]

Air New Zealand have performed much better since re-nationalisation.

 

[Stanexpat]

"Air New Zealand have performed much better since re-nationalisation."Actually
Air New Zealand still operates as a private company and wasn't
nationalised as is being proposed here in Argentina. The government
just took most of the stock in exchange for a big infusion of cash to
keep it going. Whether or not this company can continue to be
successful I can't comment on as I don't know the specifics of their
business. Perhaps some people have more confidence than I do in
this government to operate AA. I have some experience with another
enterprise they nationalized, the postal service. I had to mail my tax
return 3 months or so ago. The first post office had a wait of 2 hours
to post a letter, I went to a second and waited a full-hour to post my
single envelop.

By the way the government is already subsidising AA's fuel bill.
The high cost of fuel is what's causing most of the problems around the
world for airlines today,one which AA has not suffered from but has somehow continued to post big losses.

There have been loads of strikes and other problems at AA that
Marsans (current owners) has more or less accused the government of
having a hand in. The unions at AA are estatic about being
nationalised, they view this as garanteed job security. No more
worries about losing their jobs, the current level of overstaffing can
continue. If the government really ends up running this (which I doubt)
you can expect every politician in the country to have family and
friends working at AA

 

[Stanexpat]

One more point on Air New Zealand versus AA. ANZ number of aircraft in service 96ANZ number of employees 11,000 ANZ number of employees per aircraft 104AA number of aircraft around 65, inservice only about half 33AA number of employees 9,000 AA number of employees per aircraft in service 272AA has almost 3 times the number of employees per aircraft in service. No wonder they can't make money, enough said.

 

[Stanexpat]

Just an update, purchase was approved by the lower house last week, now goes to the Senate. There is talk now that the airline should just be expropriated from the current owners. Aside from being a bad precedent(owners of other Argentine assets and real estate should take note) what is there to expropriate, debts? My understanding is that they only own 2 of the planes they operate.
The government admitted last week that they were providing 100 million dollars to keep the airline afloat for another 2 months. My guess is when fuel subsidies are included about 2 million a day is being spend. On an annualized basis this about $720 million dollars(my guess is a lot more will have to be spendt trying to turn this around). This works out to about 80 thousand dollars for each employee of the airline. I know the government wants to save all these jobs, but spending 80k per employee (whose pay is probably less than 20k per employee) doesn´t quite seem to be an efficient way of going about it.
Actually for the sums being spendt you could shut-down the airline continue to pay all 9000 employees, start another airline of similar capacity, and still have change from your $720 million.
Are these people really that dumb or is there a swindle of massive proportions going down?

 

[gouchobob]

Just an update, purchase was approved by the lower house last week, now goes to the Senate. There is talk now that the airline should just be expropriated from the current owners. Aside from being a bad precedent(owners of other Argentine assets and real estate should take note) what is there to expropriate, debts? My understanding is that they only own 2 of the planes they operate.
The government admitted last week that they were providing 100 million dollars to keep the airline afloat for another 2 months. My guess is when fuel subsidies are included about 2 million a day is being spend. On an annualized basis this about $720 million dollars(my guess is a lot more will have to be spendt trying to turn this around). This works out to about 80 thousand dollars for each employee of the airline. I know the government wants to save all these jobs, but spending 80k per employee (whose pay is probably less than 20k per employee) doesn´t quite seem to be an efficient way of going about it.
Actually for the sums being spendt you could shut-down the airline continue to pay all 9000 employees, start another airline of similar capacity, and still have change from your $720 million.
Are these people really that dumb or is there a swindle of massive proportions going down?

Looks like this post was close to the mark. Certainly a big miss-allocation of very limited resources to keep this symbol of of Argentine pride in the air.

http://www.foxbusiness.com