Milei accelerates sale of Aerolineas – 10/02/2024 – Market

After frequent clashes, Javier Milei’s government accelerated the sale process of Aerolíneas Argentinas with a decree this Tuesday (1st) in which it defines the state-owned company as “subject to privatization”. It is the green light for Congress to analyze the issue with priority.

Strikes by Aerolíneas pilots in recent weeks led Casa Rosada to raise its tone after chaotic scenes at airports, especially at the small Aeroparque, located in Buenos Aires. More than 30 thousand passengers were affected, including Brazilian tourists.

Unions in the aeronautical sector claim that among pilots, crew and ground staff there is a salary gap of 75% in relation to inflation. Under Milei, the country is experiencing a disinflationary process, but with high figures. The interannual cumulative index for August was 236.7%, while the cumulative index for the year was 94.8%. Poverty is at record levels.

But the ultraliberal administration today in Casa Rosada claims that Aerolíneas Argentina is a loss-making company full of privileges. The decree published during the last hours of the day lists a series of criticisms, which in recent weeks have been echoed in unison by the country’s TV channels.

“Its employees maintain benefits that contribute to worsening the company’s situation, including free business class tickets for pilots and their families, as well as free tickets for two family members and a companion on holidays”, the list.

“There are 1,107 pilots and 81 active aircraft, which represents approximately 14 pilots per aircraft, a number that is disproportionate to global industry standards.” There would be 125 employees per aircraft in the company, while Gol has 97, and Copa Airlines, 70.

Milei’s spokesperson and newly appointed Minister of Communications, also economist Manuel Adorni, said that, since Aerolíneas was nationalized in 2008, during the administration of former president Cristina Kirchner, the State had to place more than US $8 billion in the company due to a chronic deficit at the state-owned company.

Aerolíneas had already been used as a bargaining chip by Milei’s government to get its Basic Law approved in Congress — formerly commonly called the Bus Law —, a package of liberal measures that included privatizations. To have the content approved in the Senate, the Casa Rosada removed the state-owned aviation company from the privatizable list.

But, soon after, the topic returned to the agenda. Milei even published a decree that limited protests by aeronautical unions by establishing that aerocommercial transport would be an essential service.

Those organizing protests had to notify authorities at least five days in advance. Furthermore, a minimum of 50% of services should be guaranteed on the day of the strike.

But the local court suspended the decree because it considered that it would go against workers’ rights, protected by the Constitution.

The government even authorized the hiring of foreign crew and aircraft for flights affected by stoppages. The authorization comes into effect in two months and allows foreign companies to cover these flights within Argentina without registering their aircraft in the country.

The SNA (National Union of Aeronauts) of Brazil spoke out against the government’s announcement. “No Brazilian company should intervene in the right to strike of aeronauts from other countries,” said the union’s president, Henrique Hacklaender, in a video.