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Friday, 17 August, 2001, 11:29 GMT 12:29 UK
Aerolineas sale delay
The Argentine airline could face closure
The Argentine airline could face closure
A decision on the future of state airline Aerolineas Argentinas has been delayed until September.

The carrier is close to collapse, weighed down by $1bn of debt, and shareholders in the airline are now pondering offers to buy the company.

Interested buyers include Air Comet, made up of Air Plus and Spanish travel group Marsans, the Clicknest consortium, a US investment fund and Juan Carlos Pellegrini, a businessman backed by Argentine investors and banks.

After failing to agree on a rescue plan with the unions last June, the main shareholder, Spanish holding company Sepi, warned it was considering closing the airline.

The airline's closure could lead to the loss of 7,000 jobs, dealing a further blow to the Argentine economy, already mired in recession for the past three years.

Aerolineas' shareholders met on Thursday to discuss the carrier's future, but agreed to put off a decision until September.

Troubled future

Discussions on the airline's future come as the International Monetary Fund (IMF) decides whether to help the country's economy with a $15bn emergency funding package.

The recession in Argentina has already sparked strikes and protests. The debate on the airline's future has sparked fresh discontent.

Public feeling is running high and many are directing their criticism at the Spanish state holding company Sepi, which they feel has stripped the company of its most valuable assets.

Since privatisation in 1990, many of its airplanes have been sold and many of its routes have been shut down, argue workers.

"We went to Amsterdam, London, Paris, Zurich and Frankfurt. All those routes, all those markets of Aerolineas Argentinas were lost and were taken by Iberia. Right now we are not even going to Madrid," Gabriel Mocho Rodriguez, a member of the stewards' union, told the BBC's World Business Report.

Sepi argues that it has invested $1.8bn in the airline during the past 10 years

Tension grows

The protests have struck a chord outside of the industry. Dozens of Argentine pop stars and celebrities have held a concert to support the workers.

Fernando de la Rua: Airline's privatisation "disastrous"

The crisis has also created tension between Argentina and Spain.

One of the main national union leaders, Hugo Moyano, has even threatened a boycott of Spanish companies over the issue.

Argentina's President Fernando de la Rua, meanwhile, has called on Spain to do more to help the airline.

He has described the aftermath of the privatisation as "disastrous".

But Spain's prime minister Jose Maria Aznar has hit back at what he calls "unjust criticisms". He pointed out that Madrid had injected $1.5bn into the airline, "which is more than Spain received from the privatisation of Iberia."

BBC World Business Report's Lourdes Heredia
"It has touched a raw nerve in recession-weary Argentina"
See also:

14 Jun 01 | Business
Aerolineas rescue talks
29 May 01 | Business
Aerolineas teeters on bankruptcy
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