Paul Lewis/MIAMI
Aerolineas Argentinas expects to complete a $200 million recapitalisation by the end of May, in readiness for the planned sell-off the following month of its parent company, Interinvest, and merger with sister carrier Austral Lineas Aereas.
According to Aerolineas chief operating officer David Cush, the airline's balance sheet has been the "primary focus" since his appointment last December. Recapitalising the carrier is a prerequisite to finding buyers for the Spanish Government's 80% stake in Interinvest, which in turn controls 85% of Aerolineas and 90% of Austral.
Interinvest's current shareholders, which include American Airlines and Iberia, each with a 10% interest, have injected new capital into Aerolineas. The carrier is also selling off non-core assets, including its share in Equant and a 55% stake in Buenos Aires Catering, and is planning a US bond offer to offset $200 million in long-term debt.
Aerolineas' owners have also embarked on a road show to market Interinvest to potential new investors. "That process will come to a close in the next 60 days or so-all the work has been done, its just a matter of people writing cheques," says Cush, speaking at the Latin American and Caribbean Aviation airline chief executive conference in Miami.
Aerolineas' parent company is primarily targeting finance investors, rather than other airlines, but confirms that neighbouring Chilean flag carrier LanChile is expressing interest. There is growing synergy between the two airlines, with LanChile awaiting a decision on its admission to the American/British Airways-led oneworld alliance and Aerolineas signalling its wish to join.
"We hope to be in oneworld sometime in the future-that is the grand plan," confirms Cush. "I would anticipate that even if LanChile is not an investor, we will have a commercial relationship with them."
Aerolineas' more immediate concern is merging with its smaller sister carrier Austral, with the aim of improving aircraft utilisation and cutting costs through the elimination of "several hundred jobs." The two had planned to merge on 1 July, "but we're looking at perhaps delaying that for another 60 to 90 days, to make sure we get all our ducks in a row," says Cush.
Source: Flight International
