Newly elected Argentine president Mauricio Macri is planning to turn haemorrhaging national carrier Aerolíneas Argentinas (AR, Buenos Aires Jorge Newbery) into a profitable entity while at the same time whittling down its funding as part of plans to close the budget deficit.
Reports out of Buenos Aires indicate the state-backed airline, which has racked up total losses of ARS18.1 billion (USD1.86 billion) since nationalization seven years ago, has already blown its budget for 2016 of ARS3.881 billion (USD400 million) by ARS792 million (USD81.58 million).
Though Macri has ruled out reprivatizing the airline, he has already begun a shakeup of its board, currently headed by Mariano Recalde. As such, Macri has reportedly named Isela Costantini, the current President and Managing Director for General Motors (Argentina, Uruguay and Paraguay), as the carrier's next president though this is still subject to official confirmation.
The Reportur newspaper indicates Macri had also considered appointing Gustavo Lopetegui, the CEO of rival LAN Argentina (Buenos Aires Jorge Newbery), to the post before settling on Costantini.
Though the removal of subsidies is expected to encounter stiff opposition from the airline's powerful unions, it will benefit smaller private operators such as LAN Argentina that have thus far been unable to compete on a level playing field.
The centre-right mayor of Buenos Aires, Mauricio Macri won this month's Argentine presidential run-off to end twelve years of Peronist Party rule. He has promised to liberalize a stagnant Argentine economy, shackled with currency controls and rising inflation, through a series of business-oriented reforms.
