Argentina’s Milei Plans to Privatize State Airline by Decree

Argentina’s President Javier Milei plans to sign a decree next week focused on privatizing the national airline, Aerolineas Argentinas, according to presidential spokesman Manuel Adorni.

Significance of the Move

Milei has criticized the current structure of the state-run airline as inefficient and a significant financial burden on the government. His initiatives to reduce costs have sparked strong opposition from labor unions.

Critical Statement

"Since its re-nationalization in 2008, state subsidies to cover the company’s deficits have exceeded $8 billion," Adorni mentioned during a press conference.

Background

Milei, an economist and former media figure, took office in December with a commitment to drastically cut government spending, address a substantial fiscal deficit, and tackle soaring inflation. Previously, a proposal to privatize Aerolineas was excluded from an omnibus bill passed by Congress earlier this year.

Employment Figures

Currently, Aerolineas employs 1,204 pilots for a fleet of 81 aircraft, which averages almost 15 pilots per plane. Earlier this month, Adorni noted that the airline had reduced its workforce by 1,500 employees in recent months.

Future Steps

The upcoming decree may enable Aerolineas to explore options for privatization, such as hiring investment banks or approaching potential buyers, according to a source within the company. However, there remains the possibility for Congress to reject Milei’s decree, as they have done previously. Though Milei’s libertarian party holds a limited number of seats in the legislature, he has managed to secure support from the main conservative coalition.