Luis Pablo Ceriani, Aerolíneas Argentinas' President, has insisted that the airline's merger with Austral (Buenos Aires Jorge Newbery) will not result in the new entity shrinking in size or lead to a jobs cull, according to reports in Pagina 12. Earlier this week, the Aerolineas boss met with the majority of unions represented at the carriers to tell them the same news.
"We assure you that there will be no shrinking of the company and that, therefore, jobs will be maintained," confirmed Ceriani on the employee impact that the merger with Austral may have. On meeting with six of the seven staff unions, the President added: "What we told the unions is that all we are doing is to take care of the jobs."
That being said, Ceriani said that changes are likely if the company is to survive and grow in the future. "All the workers, with their unions, know that something must be done. We cannot stay still to see what happens."
In terms of being able to maintain salary payments and a minimum operating structure, the carrier's boss will return to the state for substantial support, despite debt restructuring with its suppliers. "We are going to need the same level of contribution as last year."
According to a report in Aviacion News, in the fiscal year ending on December 31, 2019, the Argentinian Treasury transferred USD491 million dollars to the Aerolineas Argentinas Group, of which almost 89% went to Aerolineas and the remaining 11% to Austral. Since nationalisation in 2008 and the end of last year, the group has received state subsidies of USD6.46 billion dollars, said the publication.
Ceriani believes that valuable synergies will result from the merger, including increased productivity. "We are going to create two units, one for maintenance and one for ground handling, and both are managed as a single operational unit. A company with 80 aircraft is better than two, one with 60 and the other with 20. Duplicate structures are avoided, allowing longer flight hours [...], better utilisation and improved cost per seat and profit."
In terms of the airline's schedule returning to normality, Ceriani said the recovery would be slow. "Only when spring begins could there be some domestic flights. I don't see international flights reactivating before next year." With this year effectively written off and next year looking "complicated", the airline's President added that "in 2022 we may have a more established level of activity and there we will begin to pay all the debts." Ultimately, he believes that "several difficult years are coming."
