The Airline Fiasco in Argentina as Peso Collapses and New Plan Goes Awry

The curse of pushing volume by selling tickets below cost became an even bigger curse with the peso massacre.

By MC01, a frequent commenter on WOLF STREET:

On 27 December 2016, the Federal Government of Argentina, under new President Mauricio Macri, launched the “Revolución de los aviones,” the brainchild of the Minister of Transports, Guillermo Dietrich, an ambitious plan aimed at overhauling the stagnant airline industry in Argentina.

While often called “deregulation,” it was actually a far-reaching and ambitious plan supported by annual expenditures of about $1.5 billion by the Federal Government in the airline sector over the 2017-2020 timeframe, including modernization of many Argentine airports and the construction of the first airport “wholly dedicated to low-cost airlines,” El Palomar, near Buenos Aires.

Aerolíneas Argentinas, the flag carrier which was hastily re-nationalized in 2008 to avoid an ignominious bankruptcy, was another target of Dietrich’s reforming fury: A perpetual financial black hole, under the “Revolución” plan it was not merely to compete in a deregulated market, but was also expected to become able “to stand on its own legs,” meaning it is to become if not profitable at least able to break even in all but the absolutely worst years. Part of this plan was an ambitious albeit chaotic fleet modernization aimed at cutting operating costs while increasing capabilities.

If the plan aimed at increasing the number of airlines active in Argentina and the number of passengers flown, it succeeded beyond anybody’s wildest dreams.

In June 2019, about 1.2 million passengers flew on internal revenue-generating flights, up 26% year on year. Newly refurbished airports such as Iguazú saw traffic increase by 80% over the same time frame. The three companies that dominated the internal market for many years — Austral/Aerolíneas Argentinas, Andes Líneas Aéreas, and LATAM Argentina – now have a host of competitors, including LASA, JetSmart Argentina, Norwegian Argentina, and the most aggressive and fastest growing of the lot, Flybondi.

One of the curses of the modern air transport industry is that it has become impossible to tell exactly how much growth is due to healthy economic conditions, and how much is the result of selling tickets below cost.

And  it seems Aerolíneas Argentinas took this to the letter: To beat Flybondi and LASA at their own game last May, it made headlines by offering tickets on several routes for 499 pesos. At the time. In US dollar terms, these tickets were sold for $20, about $6 below estimated breakeven costs. And there are bigger troubles brewing.

These Argentine airlines have overwhelmingly peso-denominated revenues but a lot of bills to pay in foreign currencies, chiefly the US dollar and euro, for absolutely vital expenses, ranging from crew training to aircraft leases. With such a rapidly depreciating currency, paying these bills is increasingly hard.

But to maintain growth figures that investors expect, the already paper-thin margins on tickets need to be slashed even further, and the temptation to take over unprofitable routes just to show an increase in passenger numbers becomes too strong to resist.

And there are many hints this situation may have already reached critical mass.

Flybondi, the most aggressive and fastest growing startup, had ambitious plans to double their fleet in 2019, from 5 to 10 aircraft. These plans have been postponed “indefinitely” as falling revenues in foreign-currency terms are ironically impacting the company at a moment when passenger numbers are growing by the month.

Flybondi is an extreme case: all of their fleet is leased, and the lessors expect to be paid in hard currencies. As the Jet Airways fiasco has shown, repossessing an aircraft from a deadbeat lessee is a quick process, and a mostly or wholly leased fleet guarantees the situation will quickly spiral out of control the moment lessors smell financial troubles.

Norwegian Air Argentina, a subsidiary of legendary money-loser Norwegian Air Shuttle, is in somehow even worse condition. The airline was originally to be equipped with brand new Airbus A320neo from an order originally signed by Norwegian in 2012 when the company could seemingly do no wrong.

However, Norwegian’s worsening financial situation forces the group to slash expenditures and sell assets. Operations in Argentina started with four Boeing 737-800 transferred from existing stocks. One aircraft was returned to Europe earlier this year, leaving just three to start revenue-generating flights in September.

Norwegian’s situation is steadily deteriorating: Besides the financial woes leading to route cancellations, one of the company’s Boeing 787 recently suffered an uncontained engine failure which showered parts of the city of Rome with metal debris and brought back attention to the snake-bitten Rolls-Royce Trent 1000 engine, forcing Norwegian once again to ground their 787 fleet and lease substitute aircraft.

Andes Líneas Aéreas, a historical Argentine company perhaps better known for providing charter flights to the country’s most iconic football clubs (River Plate, Boca Juniors, etc.), has not merely shelved plans for expansion but returned all of their leased Boeing 737-800s earlier this year and is flying a fleet of obsolescent McDonnel-Douglas MD-83.

According to the company, this is due to the freefall of the peso making lease payments “extremely expensive.” Andes is presently laying off some staff and reducing flight frequency, hinting their troubles may have just started.

To complicate matters further, there’s a presidential election coming up in October. The recent primary election – after which the peso plunged 25% as stocks and the government’s foreign-currency bonds crashed – indicates that there may be a change in government. Argentina has a time-honored tradition of governments scrapping their predecessors’ reforms just out of spite, and it looks increasingly like the “Revolución de los aviones” may be an early casualty.

Aerolíneas Argentinas and their politically powerful unions don’t seem to mind the idea of going back to the “good old days,” but they better be careful what they wish for. The company’s financial situation continues to deteriorate as it managed to lose an eye-watering $489 million in Fiscal Year 2018 and looks set to have an equally bad 2019. It will take a lot of political clout to patch these enormous holes in the budget. By MC01, a frequent commenter on WOLF STREET

Rolls-Royce’s debacle for the Boeing 787 Dreamliner. And China is learning it the hard way. Read… The Engines of Large Airliners and the Costly Challenges Manufacturers Face

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  48 comments for “The Airline Fiasco in Argentina as Peso Collapses and New Plan Goes Awry

  1. CreditGB
    Aug 28, 2019 at 11:01 am

    I must be simple minded. Did I read selling something at volume at a per unit loss? When the investor money is gone, what happens then?

    • 2banana
      Aug 28, 2019 at 12:43 pm

      So far, it has worked out well for Uber, Tesla, WeWork, etc.

      • Auld Kodjer
        Aug 28, 2019 at 6:39 pm

        Exactly.

        Aerolíneas Argentinas’ biggest mistake was not marketing themselves as “a technology company, with funding secured, that is accelerating the world’s transition to sustainable travel with pilotless electric aircraft … with plans to land one of these bebes on Mars”.

  2. Aug 28, 2019 at 11:18 am

    Oh-Oh!
    And the greatest liquidity problems have been always been discovered in the fall.

  3. Rcohn
    Aug 28, 2019 at 11:32 am

    What is the difference between selling tickets below cost and keeping zombie companies alive via absurdly low interest rates or like companies like Uber or Lyft which product never has a chance of being priced above cost or companies like NFLX which have been in business for years and continues to hemorrhage cash?
    It won’t be long until the market moves on from Argentine airlines to the above examples

    • envo
      Aug 28, 2019 at 6:58 pm

      Profits are part of the ‘old normal’

      We are in the ‘new normal’ and profits are now considered a bad thing.

      In order to thrive, one must report losses every single year. Ideally as a company, if your sales volume increases your losses increase as well.

      If your losses start to narrow then you are no longer considered ‘sexy’ and investors will shun you and you will collapse.

      It is ok to report profits BUT only once you have wiped out all competition and have established a monopoly in your industry.

      BTW – I am completely serious.

    • MC01
      Aug 29, 2019 at 2:05 am

      Ryanair has long sold some tickets at cost or even at a loss and is very profitable.
      But Ryanair limits these fire sales to special occasions which are well balanced against the profitability of the company as a whole. The company may be cheap and nasty to fly with, but it’s a model for low-cost airlines whose executives want to turn a profit.

      Companies like Norwegian Air Shuttle however manage to lose money on almost every ticket they sell, with the rule of thumb that the longer the route is, the more money they lose.
      Norwegian somehow still manages to survive (perhaps to provide material for my poor jokes) but companies with a similar business model such as Cobalt, Primera and WOW have already been consigned to the scrapyard of history.

      Always remember that as long as creditors are fine with your company losing money, everything is fine: at last check Korean Airlines was sitting on a truly phenomenal $13 billion in debts and Korean banks and investment funds are apparently fine with it because they are either State-owned or think the State will come to the rescue. They thought the same about Asiana and now they will have to eat a ton of losses (my take: about $2 billion).
      But the moment investors get cold feet, it’s over. And in the airline world this often happens suddenly, like it happened with Germania: creditors either decide to cut their losses or suddenly realize they have allowed themselves to be taken for a ride by corporate snake oil salesmen.

      It will happen to all these stock market darlings if they cannot turn their business model around: Primera and WOW were once in the same position and extremely hot in the Scandinavian asset management community because they used all the tricks in the book. Now they are nothing more than ashes and dust.

  4. Iamafan
    Aug 28, 2019 at 12:08 pm

    Next is the real crash. (Sarcasm) Hope not.

  5. Aug 28, 2019 at 12:33 pm

    Build it and they will come, increase the number of routes and airlines and business will arrive. The Peso will bottom soon and things will improve.

    • Aug 28, 2019 at 12:59 pm

      Ambrose Bierce,

      I assume, “The Peso will bottom soon and things will improve” was a joke. The peso is a truly bottomless currency :-]

    • MC01
      Aug 28, 2019 at 1:01 pm

      Perhaps our definition of “thriving” is different, but mine is “make a profit without cooking the books”.
      These new airlines are very far from that point: not only they are very new to the business, but not a single one of them has a clear path to profitability.
      Flybondi is very aggressive, but that’s about it and with expansion plans shelved for now will soon hit a growth ceiling, something investors never like unless it’s abundantly padded with prfotis, which so far are missing.
      And Norwegian Argentina… let’s just say there’s a reason I call that group “Netflix of the Skies”. ;-)

      • 91B20 1stCav (AUS)
        Aug 28, 2019 at 2:22 pm

        MC01-thanks again to you and Wolf for your continued observations concerning the machinations of captains of industry and nations alike, folks far beyond my pay grade to encounter except through reporting such as yours.

        This situation reminds me of the ’90’s and earlier when in the retail moto parts/service biz when a 40% margin allowed adequate overhead coverage and employee wages, leaving a comfortable, if not fabulous income in an endeavor that was usually a pleasure to work in. Periodically, in this timeframe, a customer would come to the conclusion that were always overcharging them (it seems that some Americans HATE the idea of anyone working in a field tied to their personal recreational choices might actually be making a living from it), and decided to go into business for themselves, sure in the belief that they could sweep the field making 20%-i.e. unrealistically low pricing was the only business plan they had, and that, like Milo’s egg sales in Heller’s ‘Catch-22’, the losses would be offset by the volume inherent in their inevitable market domination. The efforts of this type usually lasted around 18 months before folding. The customers siphoned away by insanely low pricing would eventually wind up back at our shop, lamenting the passing of a place that gave them such great deals, and not really connecting that running a successful business requires a sufficient profit from that business.

        Of course, that was back then, and none of us on Main Street were ever TBTF, with a chance for helicopter money in reward for poor business planning. ‘Catch-22’, however, is no longer a thought-provoking fable, but our daily reality.

        May we all find that better day.

        • MC01
          Aug 29, 2019 at 7:27 am

          Speaking of which…
          In 2001 I bought a set of Dunlop D207RR tyres, installed on loose wheels, for €340.
          In 2019 I bought a set of Michelin Pilot Road 4GT tyres, again installed on loose wheels, for €285.
          Prices are not inflation adjusted, both tyre sets were bought from small independent tyre shops and you really cannot compare the tyres we have these days with those we had two decades ago.

          So what changed? All technologies are inherently deflationary, despite what the ivory-tower intellectuals moonlighting as central planners think. These technologies include not just the cost of manufacturing the tyres themselves, but also all the distribution channels, starting from factory in Spain where the tyres are made.
          The same applies to most loose parts these days, such as brake pads, chains, sprockets etc. I am not talking about cheap junk but parts manufactured by top brands such as Sunstar, AFAM, Carbone Lorraine etc. Throw in two decades of inflation (let’s say money lost 40-50% of its value in that interval) and this stuff is as cheap as hamburgers on a per weight basis and much better than what we used to have.

    • Aug 28, 2019 at 2:23 pm

      “Build it and they will come” …
      This is actually a good idea for Aerolinas Argentinas, though the strategy is more accurately stated as “fly a lot of passengers and bailouts will come”

  6. Petunia
    Aug 28, 2019 at 12:35 pm

    Since the majority of Argentina’s population lives in Buenos Aires and the rest of the country is essentially empty, why do they need such large planes to connect to small towns around the country? Wouldn’t a system using smaller planes be an economically better idea?

    • 2banana
      Aug 28, 2019 at 12:41 pm

      Economic principles play no part in decisions when the government will back every bad choice and/or distorts the markets with credits, subsidies, bailouts and picking winners/losers.

    • MC01
      Aug 28, 2019 at 1:17 pm

      The key word here is “flexibility”. A Boeing 737NG is a whole lot more flexible than a regional airliners such as an Embraer E-Jet (which I personally love to bits but that’s another matter).

      Flybondi is presently eyeing the Buenos Aires-Rio de Janeiro route and already has a scheduled flight every other day to Asuncion (Paraguay) and another to Punta del Este (Uruguay).
      These are pretty popular routes already, and in the low cost business the key is to pack as many people as you can in an aircraft with decent flying costs.
      The Boeing 737NG fits the bill perfectly well and is readily available on the used market and from pretty much and lessor you can thing of. Support in form of training, maintenance etc is readily available in Latin America.

      • Frederick
        Aug 29, 2019 at 6:01 am

        I fly in one of those Embraers on my last trip to Warsaw from Istanbul Nice plane

    • Aug 28, 2019 at 4:41 pm

      That may be the point. For the American West it was the railroad. A number of rich American expats have been talking up Argentina for years. Despite the currency and the government it has a number of attributes.

      • Frederick
        Aug 29, 2019 at 6:03 am

        Had a great steak with a bottle of Argentine carbernet when I was last in Tigre Great country if they could just get their act together

  7. 2banana
    Aug 28, 2019 at 12:39 pm

    Does Argentina pass laws are is everything done by a decree?

    “Argentina has a time-honored tradition of governments scrapping their predecessors’ reforms just out of spite…”

    • Harrold
      Aug 28, 2019 at 1:39 pm

      “Does Argentina pass laws are is everything done by a decree?”

      So Argentina has been paying attention to the US.

      • Javert Chip
        Aug 28, 2019 at 8:05 pm

        Over the last 10 years, I believe the US has received an intense lesson in the difference between Presidential Executive Orders and laws actually passed by congress.

  8. Satya Mardelli
    Aug 28, 2019 at 12:48 pm

    Maybe Argentina should abandon the peso and adopt the US dollar as their currency.
    Ecuador and El Salvador switched to the dollar years ago and their currency problems went away. Panama actually has two “official” currencies, the Panamanian balboa and the US dollar. Both are equal in value.
    Cambodia dispenses dollars from all ATMs throughout the country. There are a number of other countries that have made the switch.

    • stan6565
      Aug 28, 2019 at 2:39 pm

      This is an interesting parallel to Euroland. One main player with lots of small satellites attached.

      Does anyone have any statistical data which will enlighten the commentariat on successes of El Salvador, Ecuador and Panama as they adopted the currency of the ginormous neighbor.

    • Robert
      Aug 28, 2019 at 3:21 pm

      It’s not “two official currencies”- they actually pay for things with U.S. dollars which they call “Balboas” (when I was there years ago, they did have their own coins, identical in size and denomination with the corresponding American coins, but with their own unique figures: a charming Cuna Indian on their penny- and Balboa, indeed on the quarter)
      Using another country’s currency is of course not without risk: the citizens have no say as to the value of their money, and even using it is a humiliating reminder of how shabby your own elected officials are

      • char
        Aug 28, 2019 at 4:39 pm

        It only works somewhat if your income is stable because your exports have a stable prices. Argentina mainly exports income is from raw materials and they don’t have a stable dollar price. Panama earns it foreign money with tax evasion and the Panama channel. Both have a stable dollar price and El Salvador income is mostly $ remittance.

    • Javert Chip
      Aug 28, 2019 at 8:07 pm

      Argentina actually tried a US$ peg; it worked right up until it didn’t work.

      A peso-US$ peg is no silver bullet.

    • Frederick
      Aug 29, 2019 at 6:05 am

      Bad idea as the USD is on its last legs as reserve currency IMO anyway and my SS checks gonna take a big hit in foreign currency terms I’m afraid

  9. MCH
    Aug 28, 2019 at 2:51 pm

    At the rate things are going, the US legacies are going to become the model airlines of profitability and service. And that would be just horrifying. Thank goodness that certain airlines such as Singapore and Cathay still exist to hold up the quality and service standards even if the latter is suffering due to the HK situation.

    Somehow, this glut of orders on the market is going to come back and bite people. I still find it totally unbelievable that Boeing and Airbus are continuing to ramp production whenever possible, if it wasn’t for the grounding of the Max, I think the two would be pumping out somewhere between 120 to 140 single isles combined a month. That’s an insane amount of capacity.

    I wonder who is going to be left without a chair when the music finally stops.

    • Javert Chip
      Aug 28, 2019 at 8:08 pm

      There are about 500+ commercial airlines in the world; that’s a lot of chairs…

    • MC01
      Aug 29, 2019 at 5:15 am

      As a Swire Pacific shareholder (what did you expect?) I know Cathay Pacific very well. Yes, the service is amazing, but until Rupert Hogg was brought aboard the financials were on a perpetual rollercoaster, with record years followed by stuff so bad that made you want to pull your hair out.
      Hogg’s resignation is bad, really bad, not so much because of politics but because of the loss of leadership.
      Just ask Boeing what being led by a bunch of spineless corporate stooges means.

      Regarding production: Airbus has just increased A320 production to 60 per month, mostly at the Hamburg site. A plant to build 65 per month in 2022 has run afoul of engine manufacturers due to a chokepoint in turbine blade manufacturing worldwide. Capacity is really stretched thin everywhere and companies such as Mecachrome rightly fear they will be on the hook for the increased capacity Airbus want. Let’s leave wishful thinking to automotive.

      As I have said before I suspect the real blow will be felt in Asia.
      To stay in Vietnam alone Bamboo Airways has 76 aircraft on order and VietJet an absolutely stunning 312. No amount of economic growth can sustain that increase in air traffic on a single market, no matter what, and I am saying this as a long-time Asia bull.

      I don’t think we’ll see an industry-wide crash, but we’ll see a lot of order cancellations once companies realize they cannot possibly digest that amount of capacity without destroying any shred of profitability, and we’ll see a lot of Jet Airways drop dead due to poor financial discipline, but this will happen a little at a time and while mainstream media are busy screaming “passenger numbers increased by 25% year on year” or whatever the latest spin is.
      I could easily increase my business by 25% year on year if I sold my company’s services at a loss as well… ;-)

  10. David Hall
    Aug 28, 2019 at 2:52 pm

    Boeing is working to provide more 737 max pilot training with hopes of returning the grounded planes to service this year.

    Argentina subsidizing airport construction is a normal government function.

  11. KeepItReal
    Aug 28, 2019 at 3:17 pm

    Call me when they completely privatize air travel.

    • char
      Aug 28, 2019 at 4:45 pm

      Warsaw convention still rules the air so no. Besides public transportation is rarely completely without government interference.

  12. Unamused
    Aug 28, 2019 at 7:03 pm

    If you look at it carefully, especially at the costs and projected revenues, it becomes clear that Macri’s plan to create a modernised and viable Argentine aviation industry was never going to work.

    It simply does not make sense.

    The industry isn’t making money, but well-positioned political insiders are making lots of money. That was always the true goal.

    And in that sense the project is a complete success.

    Countries all over the world have fallen for this trap dozens if not hundreds of times, usually involving some grandiose infrastructure plans that the country cannot begin to afford, and always involving the global banking cartel: IMF, Goldman Squid, and so forth.

    I’ve already commented on this on Aug 13, 2019 at 6:20 am, for the post titled “Brain-Dead Investors Get Crapped on Again by Argentina”:

    Of course Argentines voted Macri out. He was screwing them for the benefit of global financiers. Argentines didn’t want a repeat of the Great Depression brought on by the IMF’s previous tool, Carlos Menem, also for the benefit of global financiers.

    And so forth.

    • MC01
      Aug 29, 2019 at 1:17 am

      The project in itself isn’t bad: Argentina desperately needs modernization in many vital sectors.
      The problem is that Macri and his PRO government are doing the same mistake General Georgios Hatzianestis did at Dumlupinar: they are focusing so much on the details they are completely missing the big picture and will pay handsomely for it.

      PRO has focused too much on hefty but secondary reforms such as this one while missing out not merely that nothing had been done to bring some measure of stability to the peso, but that their beloved IMF is run by what I can only call a bunch of amateurs with no clue about what they are doing. See their incomprehensible decision to allow the yuan reserve currency status.
      And one of those amateurs is now being rewarded instead of being limogée or, more fittingly, tarred and feathered and paraded around town for small children to laugh at.

  13. IslandTeal
    Aug 28, 2019 at 7:53 pm

    This was my first read re the Argentinian airline fiasco. Again it seems like one more example of cheap money being available to fund anything. Reference today’s announcement of the upcoming IPO of yet another crap offering calling itself as a Technology driven solution… PELOTON

    • Auld Kodjer
      Aug 28, 2019 at 8:16 pm

      Like a returning short cycle comet, or the emergence of a cicada from 17 years underground, it’s starting to look an awful lot like the year 2000 dot.bom is fast approaching again

  14. Realist
    Aug 29, 2019 at 12:20 am

    I keep wondering about all those cheap air fares. The companies have to cut corners herevand there to somehow manage and one big thicket is maintenance. Is maintenance included in aircraft leases similar to auto leases ?

    • MC01
      Aug 29, 2019 at 12:58 am

      The so-called wet lease is often called ACMI because the lessor supplies the aircraft, crew, maintenance and insurance.
      The so-called dry leases have provisions called Supplemental Rents or Maintenance Reserves which go towards paying for maintenance. These can be bundled in the overall contract or broken down in separate installment.
      As I’ve covered before, the moment a leasee stops paying the aircraft is immediately grounded and is usually returned or repossessed in a matter of weeks.

      You cannot skimp on commercial aircraft maintenance, at least not in the US, Europe and the main Asian markets (China, India, Japan etc) because failure to comply with scheduled maintenance means your aircraft is instantly grounded. And don’t even think about trying anything funny.
      To give an example Air India presently has about 10% of their fleet grounded because they haven’t got the funds to carry out scheduled maintenance. Air India has about $7.5 billion in debt and, here’s the funny bit, is fully State-owned so where’s their “helicopter money”?

  15. Unamused
    Aug 29, 2019 at 10:53 am

    Air India has about $7.5 billion in debt

    Another ‘successful’ aviation industry project. Not for the industry, but for well-placed insiders. In the old days it was dam projects and bridges.

    All very predictable. Why go through all the trouble to get rich by establishing and operating a successful enterprise, when failure is so richly rewarded with a bit of advantageous business structuring and political leverage? Why bother with careful planning and execution when artful mismanagement works so well?

    Success through failure is a common theme on this blog because the perverse financial incentives for failure are profound and entrenched. Musk isn’t a billionaire because Tesla makes so much money. Cash-burner companies are a regular feature, as are the RE bubbles and crashes, but they’re money-makers for the well-positioned. Indeed, bankrupting casinos and resorts for fun and profit gets the successful predator elected to high office. Billionaires are made by deliberately running great iconic firms straight into the ground. Stock buy-backs impair the firm but enrich the firm’s officers. There are so many variations to the ‘best-way-to-rob-a-bank-is-to-own-one’ approach.

    Better yet, a lot of the wasted money accrues to ‘GDP growth’, never mind the debt. I’ll forego the usual rant about the effects of worker repression, cultural corruption, ecological destruction, and legalised graft and fraud, except to note that these are also examples of the short-term profit motives of long-term demolition. It can only end in tears, except for those laughing all the way to the bank.

    Clearly, the secret to present-day success is to fall through that hole in the privy and come out smelling like a rose.

    Sorry.

    • MC01
      Aug 29, 2019 at 11:33 am

      Air India belongs to a slew of State-owned airlines with terrible financials such as Thai Airways and others with a cavalier approach to budgets such as Rwandair, which hasn’t published a budget since 2013! Note that not all State-owned airlines are bad: Ethiopian has long made excellent profits, even in times when local politics were in chaos, and is a great company by any standards. They didn’t deserve the MAX tragedy, but as the saying goes pioneers can be recognized by the arrows stuck in their backs.
      But Air India… it’s hardly a success story and they have a pretty nasty reputation to boot, especially among the expat Indian community.

      Sure there are people lining their pockets in these State-owned airlines, but these ‘carrozzoni’, as they are nicknamed in Italian, are mostly notable for being not merely unprofitable but incredibly inefficient at every level.
      Inefficiencies and financial losses accumulate at every level, and there’s very little interest in getting rid of them: too many people make a comfortable living out of them, from oversized janitorial staffs to vendors overcharging for pencils and stationery, and these people tend to vote in block and to have the media firmly on their side. Aerolíneas Argentinas is an excellent example of this mess.

      One final note: Charlie Chaplin once said the only sure way to get a laugh out of a crowd is to have a well-dressed man fall through an open manhole and coming out… not exactly smelling like a rose. ;-)

    • sierra7
      Aug 29, 2019 at 12:27 pm

      Unamused:
      WoW!
      Reading your post makes me want to dig my “survival” hole much , much deeper!!
      (I totally agree with you)

    • HowNow
      Aug 29, 2019 at 9:15 pm

      Don’t apologize for any of it. Your commentaries are riveting. Too bad you can’t clone your perspectives and sell them to the rest of us.

  16. Aug 30, 2019 at 3:36 pm

    I know where they can get a discount on 300 brand spanky new planes that go real fast … they have a small flitch, but boy are they pretty !

  17. Andrew
    Aug 30, 2019 at 7:06 pm

    I’m very impressed when Wolf publishes a contribution from his readers. There must be more than a few industry specialists writing in the comments section.

  18. cheapo rico
    Sep 2, 2019 at 8:28 am

    I love Argentina. For those who don’t know it used to be the wealthiest country on Earth (or near that), and Italians feeling their country either went to New York or Buenos Aires. 100 years ago.
    The city feels like Europe in the 50s, while Europe these days feels like a shithole.
    That said, Argentina turned crypto socialist and never recovered from the curse of self destruction. Socialism always leads to economic destruction , theft by the clan in power and money printing.
    And boy did they do the money printing well. For 100 years now.
    Hyperinflating to Heaven.

    What I don’t get though is that NY- BA is still 4k in business on Aero Argentina when the peso is worth nothing.
    I flew to Lima the other day , business for 3k on Latham which is not bad but not great when the listed price is 10k.
    10K? WTF?
    same with Brazil 9k?

    Please explain to me why those prices are so ridiculously high when the crew and pilots make peanut pesos/reals/shitcurrencies….
    Makes no sense.
    Going to Asia in business from NY can be had for 2-3k.

Comments are closed.