Friday, February 23, 2024

ECONOMY | 06-05-2020 11:25

Aerolíneas Argentinas and Austral announce merger

State carrier and its subsidiary will launch merger process at next shareholder's meeting, says company president, in bid to cut costs amid the coronavirus crisis.

State carrier Aerolíneas Argentinas and its subsidiary Austral announced Tuesday that they will merge as part of a bid to cut costs amid the coronavirus crisis.

Covid-19 has wreaked havoc on economic activity across the world and the tourism, travel and aviation industries are expected to be some of the worst hit.

"Today [Tuesday], through a letter addressed to the workers of both companies, the president of the business group, Pablo Ceriani, announced the merger of Aerolíneas Argentinas and Austral," a statement published on the website of both airlines said.

The process will begin when a shareholders' meeting can next be held and is expected to conclude before 2021.

Privatised in 1990 and returned to state ownership in 2008, Aerolíneas Argentinas is the largest airline in the country with 80 aircraft.

In 2017, it carried 14 million passengers to 60 destinations. Its subsidiary Austral flies to 32 destinations within Argentina and the Mercosur nations. It has 26 aircraft.

'Very complication' situation

On Twitter, Ceriani explained that "the global Covid-19 health crisis had a major impact on the commercial aviation industry."

He said that several critical months lie ahead, where airlines would be without income or regular operations.

He wrote that "he situation is very complicated, planes on the ground with no regular operations and a total drop in revenue for an indeterminate period. A tremendous impact from which 'Aerolineas_AR' is not shielded."

"In this context, we have to take the necessary measures to ensure that the company operates at its maximum efficiency," he added, saying it was the firm's "moral duty."

"Other companies make wild adjustments in an attempt to survive. We have a plan for growth and transformation. But that growth can only materialise via an efficient and sustainable work scheme," added the executive.

"If we don't manage to adopt the industry's best practices, there is no point in growing. Companies that don't adapt to the needs of their times disappear. Let's make sure that the destination for airlines is the one that we Argentines deserve," he said.



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