MARIO FONSECA / RIO DE JANEIRO
Meanwhile, Buenos Aires continues to negotiate solution to Aerolineas Argentina's woes with Spanish parent SEPI
Brazil's TAM Group has bought regional carrier Aerolineas Argentinas Express in the latest move in a continuing shake-up of Argentina's airline market.
It follows LAPA's recent transfer to local entrepreneur Eduardo Eurnekian and the ongoing talks by Spanish state-holding company SEPI to divest itself of an 85% share in Aerolineas Argentinas.
Battling against acquisition overtures from local carrier Southern Winds and Eurnekian, TAM has pulled off the purchase of AeroVip, the company behind Aerolineas Argentinas Express.
AeroVip, which was acquired for $3.75 million, has a long-standing partnership with Aerolineas Argentinas to act as a feeder for the country's largest airline. Aerolineas Argentinas Express operates six BAe Jetstream 32EP turboprops and primarily serves six major towns and regional capitals from Buenos Aires. The airline has been hit hard by Aerolineas Argentinas' deepening financial difficulties.
TAM's acquisition of AeroVip, which is being made by Paraguay-based TAM Mercosur, fulfils a long sought company objective to exploit scheduled services in Argentina. Serving as a bridgehead to the Argentine market, AeroVip will allow TAM to directly tap the considerable traffic between Argentina and Brazil.
TAM has yet to disclose any fleet expansion plans for its latest buy, but says that development of the regional airline's route network was among its short-range goals.
The take-over comes against a background of turmoil at Aerolineas Argentinas. Attempts by the Argentine Government to negotiate a solution with SEPI over the future of the airline and its sister carrier, Austral, continue, following the airline's recent request for Chapter 11 bankruptcy protection.
The flag carrier, beset by intermittent strikes since May, has slashed domestic and international routes to try to stem losses - running at up to $30 million a month. Weighed down by a $1.6 billion debt, the Chapter 11 move by SEPI followed a union refusal to accept a recovery plan which involved injecting $350 million into Aerolineas Argentinas, in exchange for 1,150 job losses and a company-wide salary reduction scheme.
While the Argentine Government has stated that Aerolineas Argentinas and Austral will continue operating, SEPI announced that it was willing to divest itself of its 85% holding in the two airlines. Eurnekian, who heads Aeropuertos Argentina 2000, a consortium that controls over 40% of Argentina's airports, has shown interest in acquiring a portion of SEPI's stake in Aerolineas.
Another interested party that has come forward is Peruvian airline AeroContinente.
Brazilian airline Varig is to supply extra capital to Pluna, Uruguay's leading carrier, to stave-off bankruptcy. A sharp fall in passenger traffic and rising fuel costs has seen the airline this year lose $52 million - more than 75% of its assets.Source: Flight International
