Latin America is ambivalent about the benefits of privately owned airlines. Bolivia and Brazil are debating whether to renationalise their flag carriers and Venezuela is starting its own.
Twelve years ago nearly all Latin carriers were government-owned. Then privatisation swept the industry, leaving only a handful of military-operated carriers plying missionary routes. But privatisation has not always brought success, prompting some to wonder whether national ownership of airlines is still not a good idea.
Bolivia typifies this attitude. Lloyd Aéreo Boliviano (LAB) has been through several owners, near-bankruptcy and an ownership row since its privatisation. Following a July referendum that froze privatisation laws, Bolivia's populist government has renationalised several former state-owned energy companies, and is pondering whether to do the same with LAB. Airline unions are pressing for that result.
Brazil's President Lula has committed his government to rescuing Varig, and cabinet members and the national development bank are engaged in intense debate about the best way to do this. Given the large debt that Varig owes government agencies for airport fees, traffic control and fuel, and the bank loan proposed to retire other debts, some ministers favour temporary government control of the airline until Varig's finances stabilise. Others propose renationalising it.
Conviasa, Venezuela's government-owned carrier, gained a new lease on life in August when populist President Hugo Chavez defeated a recall vote. With his enthusiastic backing, Conviasa plans its first flight by the end of October.
Yet all signals do not point the same way. While Bolivia, Brazil and Venezuela ponder or sponsor government-owned airlines, Peru plans to sell its air force-operated TANS. Tired of propping it up, Lima warns that TANS must be either sold or shut down.
And in Latin America's biggest airline reprivatisation, Mexico's government-owned Cintra reaffirms its intention to sell off Aeromexico and Mexicana next year.
Source: Airline Business
