The Economy Ministry reported losses of US$273 million in six months, while the company said it was “only” US$84 million

The Government’s intention to gather consensus in Congress to reactivate the project to privatize (once again) Aerolíneas Argentinas will necessarily have to go through the process of reviewing in detail the numbers of the state airline.

Since it was renationalized in July 2008, after 18 years (1990-2008) in private hands, Aerolíneas has demanded subsidies from the Argentine Treasury to be able to sustain its operation. Although it is a company with a significant level of turnover (between 1.5 and 2 billion dollars per year), its income they never finish covering their expenses.

The latest information on the company’s accounts has just been published by the Treasury Department of the Ministry of Economy. Once again, the numbers are in the red, even before the wave of strikes and “information meetings” that have been affecting Aerolíneas’ operations since mid-August.

The report “Budget execution of non-financial public companies” andprepared by the Budget Undersecretariat of the National Budget Office states that Aerolíneas had accumulated income, in the first six months of the year, by almost 820 billion pesosagainst expenses for $1.055 trillionwith an operating deficit of just over $235 billion.

Taking an average exchange rate for the period of 860 pesos per dollar, the deficit for the first quarter according to the Treasury report was equivalent to a loss of US$ 273 million.

“There is a significant increase in current income and to a greater extent than current expenditure. This is due to the increase in operating income obtained from the sale of international and domestic tickets,” said the report, dated June 30.

“It should also be noted that the company received $58,732.7 million from the National Treasurywhich will be allocated to a staff reduction plan,”

In the weeks that followed, Aerolíneas reported that these special funds were allocated to a plan for 1,500 voluntary retirements and early retirements after which “we will conclude the year with a payroll of nearly 10,400 employees13% less than at the end of 2023.”

From the air line that he presides over Fabian Lombardo They pointed out that during the first semester Aerolíneas lost money, but not that much as indicated in the Treasury report.

“So far, the loss of operating income was $84 million“, company sources said.

Why such a significant difference? According to Aerolíneas sources, the Treasury report is made to current priceswithout taking into account inflation or the jump in the exchange rate that occurred in December following the devaluation ordered by the Government.

“The Treasury’s table is not adjusted for inflation or the exchange rate,” they said.

The truth is that so far this year, Aerolíneas drastically reduced requests for funds from the Treasuryand had also received a smaller amount of contributions during 2023, in the last year of management by the La Cámpora group.

Aerolíneas said that the US$84 million deficit this year contrasts with the US$295 million deficit the company had in the first half of last year.

“We had an improvement of 72% compared to last year,” they added.

According to the Chequeado.com website, between 2009 and early 2023 the Treasury had transferred the equivalent of 7.5 billion dollars to the airline, taking the official exchange rate at the time of each disbursement.

In 2023, these Treasury expenditures decreased, but for financial reasons and not necessarily due to a drastic operational improvement.}

On the one hand, Aerolíneas issued a bond for 100 million dollars, which was partially subscribed by Anses. In addition, the Government authorized local airlines to settle dollars invoiced abroad in the “MEP dollar” market. In this way, Aerolíneas benefited from the sale of its international tickets with a significant exchange rate difference that allowed it to cushion part of its deficit.

That advantage generated from the cepo remains in force during Milei’s government although the devaluation narrowed the gap between the official dollar and the financial dollars. Even so, the exchange rate difference (paying for imports of goods and services at the official dollar and collecting dollars from abroad at the MEP price) continues to operate as an efficient shock absorber when requesting funds from the Treasury.