Argentina government invests in modernization of national airline

The government of Argentina has begun an extensive effort to modernize the national airline Aerolineas Argentinas and domestic carrier Austral.

President Cristina Kirchner unveiled a new Boeing 737/700 last week, the first new airplane bought for Aerolineas Argentinas in 16 years. The airline and its sister airline Austral were nationalized in December 2008 to maintain the airline to high standards.

The fleet, one of the oldest in the world, is being rapidly updated. A second Boeing 737/700 will be delivered the end of June, and Aerolineas will soon count on nine other similar aircraft that will be leased to be handed over before the end of the year.

In addition, the Secretary of Transportation of Argentina has announced the purchase of 15-20 new Airbus A330 and A340 aircraft for long-haul travel to improve connections with international markets.

Domestic carrier Austral will be updated following the signing of an agreement in May with the government of Brazil to purchase 20 Embraer 190 aircraft to be delivered at a rate of two per month starting in early 2010. The Embraer aircraft will be configured to Austral’s specifications of 96 comfortably-spaced seats in two classes.

President Kirchner has made the modernization of the two airlines an important aspect in her governmental policy. As she announced the new aircraft purchases she said, “Today is a very special day. After 16 years, Aerolineas Argentinas is buying new aircraft. It is not just an economic story; it is also the restoration of national dignity.”

The Embraer aircraft will cost US$600 million (Euros 436 million), of which 85 percent will be financed through a loan from Banco Nacional de Desenvolvimento Econômico e Social (BNDES) of Brazil. As part of this agreement, Embraer will produce spare aircraft parts in the Military Aircraft Factory in the city of Cordoba.

The new planes will replace B737 and MD80 aircraft, allowing Aerolineas Argentina and Austral to operate their fleets with greater operating efficiency, lower maintenance costs, and reduced pollutant emissions.

The new 737/700 has a range of 6,000 km and flights of over seven hours, which will allow Aerolineas Argentina to explore new international routes to accommodate the rapid rise in tourists visiting from Europe and the United States.