Argentina's state airline Aerolineas Argentinas is cutting staff and routes to prepare for potential sale

From Investing.com: 2025-01-03 06:17:41

Argentina’s state airline, Aerolineas Argentinas, is undergoing cutbacks to prepare for a potential sale, including a 13% reduction in staff and the elimination of money-losing domestic routes and in-flight snacks. The move is part of President Milei’s pro-market reforms and has already led to improved operating results in 2024. Milei is determined to privatize the airline or shut it down if necessary to cut the deficit.

As part of the streamlining process, Aerolineas has cut loss-making routes, frozen wages, and reduced in-flight snack options to save money. The airline is aiming to become more competitive in the face of opposition from unions and political adversaries. Milei’s administration is pushing for deregulation of the sector to attract low-cost carriers and foreign competitors.

Milei has expressed interest in selling Aerolineas in one go, with several international airlines reportedly considering acquisition. The only public suitor is holding company Abra Group, which controls Avianca and Gol. However, analysts warn that Aerolineas could be a tough sell due to its financial and labor issues. Milei’s “Plan B” involves selling the airline to its employees, a proposal that unions have rejected.

Since the cutbacks began, domestic travel in Argentina has fallen by 9%, with fewer flights available. The reduction in routes and subsidies has had a significant impact on travel within the country. Aerolineas employees and passengers are feeling the effects of the changes, with uncertainty looming over the future of the airline.



Read more at Investing.com: Argentina’s state airline cuts staff, routes, passenger perks ahead of possible sale By Reuters