Given a closure of Argentina's airports to commercial air traffic that stretches back to March, LATAM Airlines Group has confirmed its LATAM Airlines Argentina (Buenos Aires Jorge Newbery) subsidiary has now ceased passenger and cargo operations "for an indefinite period".
"This is regrettable but inevitable news. Today, LATAM must focus on transforming the group to adapt to post-COVID-19 aviation," Roberto Alvo, CEO of LATAM Airlines Group, said in a statement. "Argentina has always been a fundamental country for the group and will remain so, with LATAM's other affiliates continuing to connect passengers from Argentina with Latin America and the world."
The airline holding said that although LATAM Airlines Argentina will cease flights to/from 12 Argentine destinations, its international network in the United States, Brazil, Chile, and Peru will continue to be served by other LATAM affiliates, once the authorities lift COVID-19-related travel restrictions. Likewise, international cargo routes will continue to be served by the other group affiliates.
LATAM Airlines Group, which is currently under bankruptcy protection, said LATAM Airlines Argentina is the only group affiliate that will cease operations.
Local economic news portal Infobae said LATAM Airlines Argentina was forced to take this drastic step after trying, without success, to reduce staff wages by 50%, a measure that was rejected by both unions and the government. For its part, the Ministry of Labour rejected the move as "unilateral" and "encouraged" the company to maintain 100% of wages.
"The announcement is a result of current market conditions, exacerbated by the impact of the COVID-19 pandemic and the difficulty of building structural agreements with local industry actors, which has made it impossible to foresee a viable and sustainable long-term project," LATAM said.
Founded as LAN Argentina (Buenos Aires Jorge Newbery) back in 2005, LATAM Airlines Argentina operates thirteen A320-200s 12 cities throughout Argentina - Comodoro Rivadavia, Córdoba International, El Calafate, Iguazu, Mendoza International, Neuquén, Rio Gallegos, Salta, San Carlos de Bariloche, Tucumán, Ushuaia, and Buenos Aires Jorge Newbery - as well as Miami International, Santiago de Chile, Lima International, and São Paulo Guarulhos internationally. According to local media, Argentina's second largest carrier by fleet-size after Aerolíneas Argentinas (AR, Buenos Aires Jorge Newbery) has accumulated losses of USD260 million dollars over the last two years. Its demise will affect all 1,705 employees.
With one of the strictest lockdowns on the planet, the Argentine government has banned the sale and purchase of all tickets until September 1. However, given severe criticism, Bloomberg said last week that Alberto Fernández's administration was strongly considering allowing domestic flights to resume in July followed by international ones in August.
