Tuesday, September 25, 2012

Wednesday Wrapup: Aerolíneas v. LAN, Uruguay & the Dollar, Tango by the River

Today’s entry analyzes recent happenings around the Río de la Plata.

Aerolíneas Vetos LAN
By consensus, state-run Aerolíneas Argentinas is a disaster for its shoddy service, inability to keep its schedules, and propensity to hemorrhage money. After its renationalization in 2008, it came under the dubious control of the Peronist youth wing La Cámpora and, by all accounts, things have just gotten worse, with losses averaging upwards of US$1 million daily.
When counseling potential visitors about travel to Argentina, I tell them to avoid Aerolíneas whenever possible, in favor of LAN Argentina, the local affiliate of Chile’s LAN Airlines. Unfortunately, LAN has fewer planes and flights and, despite the company’s desire to expand its services, it will not be able to do so. That’s because, according to the Buenos Aires daily La Nación, the Administración Nacional de Aviación Civil (Civil Aviation Administration) has rejected LAN’s request to add a new Airbus 320 that would have allowed the airline to expand its Patagonian routes.

Given the current government’s extreme protectionism, its rejection of LAN isn’t exactly startling, but it comes at great cost. The country loses a US$40 million investment that would have improved and expanded air services for Argentines and visitors alike, and created a number of permanent jobs. Anonymous sources quoted by La Nación suggest that the government was worried that LAN would take business away from Aerolíneas.

In a sense, such worries are legitimate. LAN is an exemplary airline, even as it endures the difficulties of operating under an often capricious Argentine political and economic system. Aerolíneas, on the other hand, embodies that very capriciousness and, on a level playing field, is probably incapable of competing with LAN.

Mujica’s Backhand Compliment
Uruguay’s tourism sector is concerned about this coming summer because of the so-called “currency clamp” instituted by the Argentine government, about which I have written several times recently. Uruguayan President José Mujica, though, doesn’t appear to share that concern, even though his country’s prosperity depends, in part, on the annual Argentine invasion of Punta del Este (pictured below).
That’s because, said Mujica as quoted in Saturday’s Buenos Aires Herald, “Argentines are champions when it comes to taking dollars abroad! World champions!” despite the restrictions. “Argentines distrust their currency, save in dollars and somehow manage to make it.” Whether the Argentine government shares Mujica’s admiration for its cleverly evasive citizens is doubtful.

Tango by the River
As announced the other day, there’s been a postponement of my digital slide lecture on Buenos Aires at Tango by the River in Sacramento, which will now take place Friday, October 26th, at 6 p.m.

Limited to a maximum of 50 people, the event will also include tango performances; admission costs $10 at the door, or $8 in advance. I have spoken here several times before, and we always sell out, so plan in advance. Signed copies of my Moon Handbooks on Argentina, Buenos Aires, Chile and Patagonia will be available at discount prices.

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