Topic of the Week: Argentina Tries to Kill Competition Once Again

Argentina has stepped up its attacks on competition in the country’s airline market once again by deciding to evict LAN from its hangar at close-in Aeroparque Jorge Newbery in Buenos Aires. LAN is the only credible competitor to flag carrier Aerolineas Argentinas, and if evicted, this was severely restrict LAN’s ability to operate.

Anyone think this is a good idea?


18 Responses to Topic of the Week: Argentina Tries to Kill Competition Once Again

  1. John U. says:

    Given Argentina’s history since the Peron era and the behavior of Ms. Kirchner, should one even be surprised? A real shame and a lesson for the USA b/c Argentina was the richest country on earth around 1900…

  2. None of my Argentinean friends fly Aerolineas — they all take LAN over AR. There’s a big discrepancy between the on-time performance of LAN vs. AR. Plus, AR is much more likely to cancel flights. Put simply, one of these airline is professionally run … and the other is Aerolineas.

    As to Aeroparque, it’s a great little airport, with a very convenient location — much prefer it over the out of town Ezeiza. Plus, convenience aside, you get a great view of the city when flying into Aeroparque.

  3. AA says:

    It´s another unthinked and ignorant decision of a government that doesn´t have a plan…..at all. Yesterday, an official referred to LAN´s facility at SABE, as “little hangar”, trying to minimize the impact of leaving the airline without it.
    Finally, a judge decided to call time out and deactivate the eviction, due to “…lack of enough time to move the operation to Ezeiza (SAEZ)…”
    Hopefully, LAN will continue flying and AR will continue spending $ 2MM per day from argentinean taxpayers.

  4. Jay F. says:

    The official story is that Ignacio Cueto, COO of LAN Chile, met this week with the Argentinian vice-minister of economy, Axel Kicillof, to explain the harm done to LAN operations in the airport closer to Buenos Aires city center by removing access to LAN’s hangar there. The minister expressed surprise about this incident and set further meetings to clarify the situation. Aerolineas Argentinas is asking for full access to provide cargo services to Chile, as was promised around 2008 when Aerolineas was part owned by a Spanish enterprise.

    Aerolineas seems to be acting in a desperate attempt at self-preservation. It is losing money and now that the two biggest carriers in South America have merged – LAN Chile with TAM Brazil- the competition is in favor of LATAM which can control operational costs much more efficiently. The dispute is about the profitable cargo routes, not passenger access. Since the COO of LAN provided a positive statement after his meeting with Argentinian officials is a moot point to argue about impact or fairness of the situation.

  5. Competition is always good for the flying public!

  6. It doesn’t seem right. It just shows that AR and the government is scared of good service trumping bad. Instead of trying to improve AR, they just do what they can to hinder LAN and better service to the local people.

  7. dan powers says:

    Take note, LAN-argentina has also been denied the right to use jetways at aeroparque….all of them monoplized by AA/Austral…..

  8. Axelsarkis says:

    Nothing surprising from Kirchnerland: stifling profitable competition that provides a better service. Anywhere else, AR would have died long ago.

  9. The government of Cristina Fernandez Kishner (The Kishner Dynasty) is one of the most corrupt, inefficient and anti-democratic in the history of Argentina – AND that is saying something! They have nationalized foreign investments to steal money/assets, they just lost a major court battle a couple of days ago in the U.S. trying to escape another rip-off scheme of investers who had purchased Argentine Bonds. They must now pay a good part of the mountain of money they stole from investers. Money they don’t have. This woman and her young advisers (friends of her jet-set son) are looking at every manner to get cash or assets from any source of funds. It doesn’t matter if it is legal or not. They have the power – at this time. They have looted funds from the national bank, retirement funds, health funds, all areas that were a no-no, until her government “fixed” the Constitution.

    She is playing the flag waving card in the Malvinas (Falkland Is.) and must preserve the national airline to maintain a positive public image. At all costs.

    So playing games with the airline competition is small bananas in her scheme of things. IATA involvement or some organization on that level, which can act to clip her wings is the ONLY language that this renegade government will listen and react to. The illegal actions against competing airlines by ANY government cannot be tolerated. If the world lets her get away with another unfair and illegal act other countries could do the same in the future.

    I am surprised that the international agencies which monitor, regulate and control airlines have not yet moved against this bandit state! Play by the Rules or ban AR from flying to member countries. Simple as that, in my book!

  10. dan powers says:

    cristina has no clue about aviation…her 757-200 was parked for a while because she was afraid to fly on it (after an engine failure on a reposition flight). today she cannot take it on any international flight because there is a possibility it could get impounded…like the navy ship in Ghana.

    • She is as dumb as a nail. Her only thinking is follow the bucks. She has over reached in many areas. Air transport is one. All that needs to happen in this arena to makle her tow the line is someone needs to slap her wrist – HARD. She would stop playing aviation games FAST.

      • Axelsarkis says:

        We need her to stop playing all sorts of games, not just aviation ones.

        How this woman was elected (and re-elected) is beyond comprehension.

        • She was re-elected similar to how Bush was “SELECTED” for a second term. Fool the voters and have your brother count the votes. Argentina has only two options; 1) Vote her AND her political party out or 2) The historic Argentine use of the military card.

          Remember, nothing lasts forever.

  11. Bravenav says:

    Whether it is a good idea or not is irrelevant. LAN had a valid lease on the hangar and had not violated the lease agreement. The government’s only explanation was “for the good of Argentina” which of course means for the good of Aerolineas. This is horse excrement!

  12. tomhmartin says:

    While I’m no supporter of Evita Kirchner, she screws her own country too. Argentina taxes exports – no one can understand that in Argentina!

    She needs to let the market dictate. She’s already forced Pluna out of business by not allowing them to fly between MVD and BUE – the main market. She also has prevented EZE-MVD-EZE tags by UA and AA. While it may not sound like much – They were the only connections from OA to MVD via EZE. Also, it was a huge cargo flight for both AA and UA. It wasn’t uncommon for a 767-300 to have over 80,000lbs of freight connecting over EZE to the UA/AA hubs and beyond. The flights may have carried a small amount of passengers, but it was extremely profitable with cargo. Although, AA has a nonstop MVD-MIA, it can’t carry 1/4 of the tonnage they could get over EZE.

  13. Antonio R. says:

    The best way for good business is not having any competence. But this is only one more chapter in the airlines story of Argentina to promote their flag company. Aerolineas Argentinas has some competitors and the most relevant is LAN, a chilean airline whose efforts to increase their market have always been damaged by diverse obstacles.

    Indeed, in the past two years, LAN had to overcome several difficulties to continue operating in Argentina, as the decommissioning of fingers to board passengers in Jorge Newbery Airport (operated by Aerolineas Argentinas) or conflicts with the only company that provides ground services at that airport, “Network World” (government-owned). The latest episode has been the order of the National Airports Org. to LAN abandon its facilities (in which invested more than US$ 5 million and by paying an annual fee of US$ 20,000).

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