Emilio Cabrera, formerly president of Babcock Wilcox in Spain, has moved to Buenos Aires to become executive director general of Grupo Aero Argentino, and to oversee the restructuring sought by SEPI, the Spanish holding company that controls 85% of the airline's shares. Cabrera has been involved with several Spanish public enterprises.
One of his tasks will be to retire as much of the airline's estimated $1 billion debt as possible. Even with the fresh capital agreed in October, Cabrera will have less than half that much at his disposal, so it is likely that some debts will have to be renegotiated, among them Aerolineas' $86 million tax bill.
Cabrera's biggest challenge will be the three unions that proposed an alternate rescue plan for the airline. SEPI backed down from its initial proposal to cut staff and salaries, which sparked so much adverse reaction, but the unions are upset that the shareholders did not adopt their proposal, and remain openly critical of SEPI's plan.
They claim it does not address the underlying problems at Aerolineas, which they insist stem from absentee ownership and managers and poor utilisation of the airline's route awards and fleet. The dissidents, which comprise three of the seven unions who together own 10% of the airline's shares, also threaten to sue over dilution of their shares. Four other unions, including the pilots, support SEPI's plan.
On the international front, the Government has changed its mind and decided to ratify its open skies bilateral with the USA next year. This reflects the policies of Argentina's economy minister, José Luis Machinea, who recently took over the transport portfolio.
Source: Airline Business
