Saturday, July 12, 2008

Will Argentina Be Grounded?

For domestic flights, Buenos Aires's Aeroparque Jorge Newbery (pictured here) is one of the world's most convenient big city airports, only ten minutes from our Palermo apartment and not much farther from most other parts of the city (its major disadvantage is the noise it generates, though we don't much notice it since installing double-paned windows). But that convenience won't mean much if the disorder within Aerolíneas Argentinas continues or, Darwin forbid, gets even worse.

According to an editorial in today's Buenos Aires Herald, the government is trying to force out the Spanish Marsans group in favor of Argentine investors. Marsans's management certainly deserves criticism, but government price controls (especially given rising fuel costs) and ongoing labor problems (money-losing Aerolíneas owes mid-year bonuses to 9,000 employees) have made the airline an increasingly unprofitable venture. The question is whether any Argentine investors will step up or the airline will be re-nationalized - perhaps the least desirable option of all, given its record under previous state ownership. In such a "survival of the unfittest," both Argentine fliers and foreign tourists could be in for a trying season.

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