Argentina in air rights dispute with Uruguay

On 23 July 2009 Airline Business reported on an air rights disagreement between Uruguay and Argentina that is seeing the Urguayan carrier, Pluna, switch its attention to Paraguay where it plans to create a mini hub.

Argentina has recently renationalised Aerolineas Argentinas.

Aerolineas Argentinas to be expropriated?

Reuters is carrying a report dated 23 October 2008 that the Argentine Government is considering expropriating Aerolineas Argentinas. The government had been in talks to buy the airline (see previous post).

The airline is unusual in that it is foreign owned and controlled by Spanish interests, the Marsans group, probably giving many of Argentina's bilateral air services agreement partners the right to refuse to grant it operating authorisation. To my knowledge none have done so.

New Zealand Commerce Commission investigating alleged air cargo rate fixing

On 16 July 2008 the New Zealand Commerce Commission issued a media release announcing that it was filing criminal charges against Cathay Pacific Airways, Singapore Airlines Cargo and Aerolineas Argentinas. These airlines are alleged to have not provided information and documents during an investigation into allegations of price-fixing and other anti-competitive conduct in the air cargo industry.

The New Zealand Herald carried a report about this action on 16 July 2008, including comments from Cathay Pacific and Air New Zealand.

On 28 June 2008 the Herald reported on a related very large settlement reached by some international airlines with the US Justice Department described as "the highest total amount of fines ever imposed in a criminal antitrust investigation."

Airlines looking for government support in hard times

With the price of jet fuel having doubled in 12 months and a weakening global economy, the international airline industry is "battening down the hatches" by cutting services, laying off skilled staff and grounding older, less fuel-efficient aircraft.

It will not necessarily always be a case of "creative destruction" or "survival of the fittest." Past history would suggest that many "flag" carriers will again look to survive through government intervention. All around the world there are already signs of this happening:

In South America - on 17 July 2008 Reuters reported that the Argentine government is to takeover Aerolineas Argentinas from the Spanish travel group Marsans.

In Asia - on 10 July 2008 The Times reported that it understood Air India is seeking a "rescue finance package" from the Indian government of UK Pounds 270 million.

In Oceania - on 14 July 2008 Pacific Magazine reported on the latest developments with respect to the finances of Air Tahiti Nui. Note the reference to the airline's 16th recapitalisation being approved last year.

In Europe - on 15 July 2008 Reuters reported that the European Commission has received a reply to its concerns about the Euro 300 million loan from the Italian government to Alitalia.

In Africa - on 16 July 2008 SABC News reported that South African Airways says it needs another Rand 5.7 billion in government funding to reduce its debts.

In North America - the US Air Transportation Stabilization Board continues its existence and Chapter 11 bankruptcy protection provides a safeguard for US airlines.

Meanwhile in the Middle East some of the major Gulf airlines simply do not report their losses and their aircraft orders continue unabated. A 15 July 2008 Wall Street Journal article, with some more positive news from the global airline industry, suggests that Etihad Airways will miss its target of breaking even by 2010.

Finally, tongue in cheek, referring to this poster about a government funded air service means that I have all continents covered!

Argentina-US air services arrangements to expand

A statement issued by the US State Department announces new air services arrangements initialled by Argentina and the United States at negotiations held on 20-22 March 2007 in Washington DC. It is not "open skies" for passenger services but available capacity would be substantially increased and new route opportunities created.