Aerolineas Argentinas Aims to be Worst Airline Ever

Have you seen what’s been going on with Aerolineas Argentinas lately? I hadn’t, actually, until a reader brought it to my attention. Aerolineas Argentinas Worst Airline In TrainingThough Alitalia is still the worst airline ever, it appears that Aerolineas Argentinas is jockeying to be next in line.

Let’s start with a brief timeline.

2001: Aerolineas Argentinas is bankrupt; Spanish firm Grupo Marsans picks them up
2002-2007: All hell breaks loose
2008: The government decides to take the airline back into its own hands

That explains it all, right? Ok, maybe not. All sorts of charges have been thrown against Grupo Marsans (read reply #6). On one hand, there have been some very questionable decisions. How about the brilliant move to order A380s for the airline? Yeah, not so brilliant, right? Like there’s any need for an airplane that big on any route out of Buenos Aires . . . .

But that’s likely just the tip of the iceberg here. The allegations that Marsans was effectively manipulating Aerolineas Argentinas to benefit its Air Comet subsidiary sounds like shades of Frank Lorenzo’s Texas Air’s handling of Eastern Airlines.

Of course, to truly compete for worst airline ever, you have to have some serious labor strife. Don’t worry about that one, because these guys have been striking on a regular basis. (I suppose that shouldn’t be surprising, especially with the news that the company is falling behind on salaries.)

So far, we have all the ingredients for a strong candidate for worst airline ever except for one . . . government interference. But wait, we have that as well! Since it’s not illegal like it is in the EU, it’s not nearly as much fun as watching the Italian government, but hey, it’s still pretty good.

Earlier this year, the government struck a deal with Marsans to reduce its stake from 95% to 35%. The government will take 20%. Um, ok. But apparently that’s not enough. They’ve also forced state-regulated fare levels. At least they also subsidize oil, I guess. But somehow they’ve still lost $100m this year.

Where is this leading? A full nationalization, of course. The government has now asked the courts for an administrator to take over the airline, and a takeover is being negotiated

So let me get this straight. The airline already has fixed fares, subsidized fuel, and they can’t make money? I’m sure the government will be able to straighten this one out. Yikes. Marsans really isn’t happy, but maybe they should be. This sounds like a no-win situation.

For the people of Argentina, the best they can hope for here is that their country follows in the footsteps of Ecuador and Peru . . . let LAN expand significantly and run a real airline that serves the country well.

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