Aerolineas Argentinas' Controversial Path to Privatization

Aerolineas Argentinas is undergoing significant downsizing in preparation for potential privatization, involving staff cuts, route reductions, and retractions of in-flight services. These restructuring efforts align with President Javier Milei's pro-market reforms, though they face opposition. The moves aim to lessen the airline's fiscal impact on Argentina's government.

Aerolineas Argentinas is slimming down with an eye toward privatization as it trims staff by 13%, scales back unprofitable routes, and removes passenger snacks, according to insider sources and documents. This strategic reduction seeks to ease the airline's burden on the Argentine government and attract private investments.

The airline's adjustments encountered pushback, yet delivered impressive operating results in 2024, a year after libertarian President Javier Milei assumed office, ushering in major economic reforms. Amidst a contentious political backdrop, Milei remains determined to privatize Aerolineas, a challenge highlighted by protests and flight disruptions.

Unions argue Aerolineas plays a crucial social role, indispensable in a vast country with limited transport links. The scaling back impacts that role, lowering domestic travel by 9%. Talks of potential buyers, including holding company Abra Group, have surfaced but remain unofficial as the privatization journey unfolds.

(With inputs from agencies.)