Improbable Land of Opportunity? Argentina might not top most lists of promising airline markets. But that could be changing.
On Nov. 16, Tony Tyler named names. Speaking in San Juan, Puerto Rico, at an event hosted by the Latin American & Caribbean Air Transport Association, the IATA chief fingered two Latin American countries in particular for “misguided policies and decisions.” One, unsurprisingly, was Venezuela. The other: Argentina.
Criticizing Argentina for bad government policies is, to be sure, no great break with convention. But could Argentina’s days of being mentioned in the same breath as Venezuela be numbered?
IATA’s charge, after all, comes at a pivotal time for the country, a time of great hope for airlines as a new president takes office. Mauricio Macri represents a sharp break with Argentina’s populist past, promising a more open and pro-business economy, an end to foreign exchange controls, better relations with the U.S., a truce with foreign bondholders and, yes, new aviation policies.
One thing Macri speaks of doing is ending or at least curtailing subsidies for Aerolineas Argentinas, which has been 100% state-owned since its nationalization in 2008. Losing this largesse would naturally lead to big changes in the way Aerolineas manages itself—and big opportunities for rival airlines able to finally compete on a more level playing field.
An end to the era of enormous subsidies for Aerolineas is still just a promise, not a fact. And similarly, talk of a possible re-privatization is for now just that: talk. But one thing that’s certain is that the new government will install a new CEO for the airline, reportedly a former auto executive with experience negotiating with Argentina’s strong labor unions. Gol too, by the way, in neighboring Brazil, is itself run by a former auto executive. Interestingly, the CEO of LAN Argentina will become one of the new president’s chief economic advisors—he’s someone who presumably values the importance of aviation to economic growth.
In 2012, Airline Weekly called Aerolineas Argentinas a candidate for world’s most dysfunctional airline, losing enormous amounts of money, as it was, even during the long economic boom throughout Latin America, which ended only recently. But although red ink continues to spill, the carrier has made some improvements. In that same year 2012, the carrier joined SkyTeam and has since expanded cooperation with international partners, including Gol…
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