August 28, 2013
A LAN source expects the Argentine government on Thursday, Aug. 29, to rescind its demand that the airline vacate its hangar at the Aeroparque Jorge Newbery airport in Buenos Aires by Aug. 30.
Unions representing pilots, flight attendants and mechanics in the country—from Aerolineas Argentinas, LAN Argentina, Andes and Sol—have threatened to strike on Friday if the Argentina Regulatory Agency of the National Airport System (ORSNA) does not allow LAN Argentina to keep its hangar. The Argentine regulator argues that Latam, as a privately owned airline, is not entitled to use the government-owned facility.
The carrier received no prior warning about ORSNA’s eviction notice on Aug. 20, giving it only 10 days to clear out of the hangar, for which it has a lease until 2023. The airline invested $5 million in the facility in 2008 and pays $20,000 in monthly rent.
LAN Argentina, which operates 14 aircraft, will continue flying out of the central Buenos Aires airport regardless of what happens at Aeroparque in the near-term; but operationally, the airline needs the 2,500-sq.-meter (27,000-sq.-ft.) hangar at Aeroparque to perform overnight maintenance checks on three or four aircraft daily.
The other 10 aircraft are parked overnight on the tarmac at Ezeiza, Aeroparque or Santiago, depending on the flight schedule. However, the airline does not occupy a hangar at Ezeiza, so it only completes minor maintenance there, such as tire changes. It would be extremely difficult to transfer the overnight checks done at Aeroparque to Ezeiza if the Argentine government follows through with its threat to close the hangar at the centrally located airport.
LAN Argentina employs 2,850 employees and holds a 30% market share in the country. It recently tried to add a 15th aircraft, but the Argentine government denied the request.
The hangar conflict is the second recent major altercation between the Latam Airline Group and the Argentine government. Just three months ago, Intercargo, a state-managed baggage and ground-handling services company, abruptly demanded that LAN pay $7.5 million immediately or it would stop servicing its aircraft. LAN had to cancel flights for a day until it was forced to settle and pay $3.5 million—supposedly for increased charges—even though its contract with Intercargo was not up for renewal.
Intercargo is linked to the political group La Campora, which reportedly is controlled by Argentina’s President Christina Fernandez de Kirchner.