Air Transport World

Aerolineas Argentinas fills tall order. (to become profitable)

Aerolineas Argentinas fills tall order

When Dr. Horacio Domingorena and his new management team were handed the controls of Aerolineas Argentinas in December 1983, they were exhorted--in fact, told--to make a profit in 1984.

Considering the troubled state of the Argentine flag carrier, it was a tall order.

Although Aerolineas boasted a history of profitability, including six successive blackink years from 1976 through 1982, it had fallen into anxious times. Still reeling from the sluggish world economy and high fuel prices that had also crippled other international airlines, it faced added difficulties: heavy indebtedness from recent purchases of new equipment; Argentina's own ailing, inflation-ravaged economy; and the effects of the country's bitter 1982 war with Great Britain over the Malvinas (Falkland) Islands.

Aerolineas' 1984 financial results hadn't been released at presstime, but officials were confident that, when finally published, they would show an operating profit. But regardless of the size of the profit, the numbers will represent a sharp turnaround from the $74 million operating loss posted in 1983.

New management team

To be sure, the pickup in the world economy and more stable fuel prices aided the reversal in fortunes. Yet, management decisions clearly played a role. The executive team is headed by Domingorana, a politican who was installed as the airline's president by the democratically elected Argentine government of Raul Alfonsin within days after it succeeded the previous military regime. Day-to-day management is led by General Manager Osvaldo Gimenez, an airline professional who rose through Aerolineas' ranks. Much of the rest of the top staff is also new, as well as the entire board of directors.

"The first message we received in December 1983 was to become self-sufficient and profitable in 1984,' recalls Ernesto Siedloczek, commercial manager. "It was made very, very clear to us.'

Despite the daunting combination of circumstances it faced, much of Aerolineas' problem stemmed from its own lack of aggressiveness, admits Siedloczek. …

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