DAVID KNIBB SEATTLE August is the earliest Buenos Aires will reconsider its decision to suspend Argentina's open skies bilateral with the USA. But if the present mood prevails, the bilateral faces a tough future.

At least four US officials have met with their Argentinian counterparts since the new government in Buenos Aires announced in January that it would delay ratifying the bilateral. The Alliance government that came to power in December has lost few opportunities to criticise the former administration of Carlos Menem. That criticism extends to its agreement to open Argentina's skies to US carriers over a phased period.

The crisis at flag carrier Aerolineas Argentinas has given officials grounds to delay the bilateral. Nicolas Gallo, infrastructure minister, told Alan Larson, US Undersecretary of Commerce, that "a bankruptcy in Argentina is not just like in the USA", and that Aerolineas needs time to recover.

The Spanish holding company that has taken control of Aerolineas has promised a restructuring plan for the troubled airline by late March. Gallo insists it will take at least four months of operations under that plan to see if Aerolineas can survive the added competition that open skies would bring. That makes August the earliest possible date.

Buenos Aires seems wary of an open skies deal. Comparing the clout of US carriers with that of Argentinian airlines, one industry official notes: "It would be a very asymmetric relation." The Argentinian Government seems more interested in liberalising aviation with its neighbours. Marina Donato, undersecretary for air transport, plans to promote the open skies approach with Brazil and other members of the Mercosur group.

Source: Airline Business