In Just One Year, Federal Money Represented 55% Of Aerolineas Argentina’s Income
<p style="line-height: 20.7999992370605px;"><span style="line-height: 1.6em;">It happened between July 2008, when the rescue of the company began and public participation was at 25%, and July 2009. At that time, the airline raised $ 615 million, of which nearly $ 340 million came from the national treasury. A report of the AGN says that during their investigation they had no obligation to hold accountable the funds transferred, and it is not known whether part of the financial assistance will be treated as passive or capital contributions.</span></p> <div> </div>
A year after the re-nationalization of Aerolineas Argentinas, the contribution of the National State came to represent more than half of the company’s income.
The information comes from a report by the Auditor General's Office (AGN, by its acronym in Spanish) approved this year, where it notes that in July 2008, when it began the rescue of the argentine airline, Federal participation reached 25% of its revenue; $ 110.8 million out of a total of $ 446.7 million; and for the same month in 2009, this proportion reached 55%, because of the $ 615 million Aerolineas reported as income $ 339 million came from public assets.
The Report
According to the AGN, "The Federal Government, through the Department of Transport provided funds to Aerolineas Argentinas for a total of $ 2,267,132,135". This amount includes two previous resolutions on the signature of the memorandum of agreement of July 17, 2008 when the process of re-nationalization of the company. The watchdog points out that 47.5% of these disbursements went to the "personal" category.
Despite this increased transfers, the research adds that during the period analyzed the Group (referring to Aerolineas, Austral and controlled companies Jet Paq, Optar y Aerohandling) "was not obligated to account for funds from the National State under a specific national regulatory regime. Also, there was not a formally approved proceeding for application and accountability of such funds, being used solely a circuit agreed with the Internal Audit Unit of the Ministry of Federal Planning, "in fact, the body designated it as" expropriating".
However, after the audited period, a document approved by the Directory on October 8th, 2009 established an "information regime for the purposes of approving the accountability of funds transferred by the Secretary of Transportation", which was not verified by the Federal watchdog.
The AGN also notes that in the recitals of a resolution that transferred for the eight time funds on September 30, 2008, notes that the amount of financial assistance will be "a credit and / or a contribution in favor of Federal Government, in accordance with what will be resolved". This means that at the closing of the investigation it was unknown whether public funds would be incorporated as liabilities or as capital contributions.
Expenses
Moreover, during July 2008 and July 2009, total expenses of the airline companies increased by 46.8%. Of this total, says the AGN, 81.1% are from operating costs. When analyzing the items with the highest cost increase, the watchdog lists the category "salaries/diem payments and social charges, aeronautical equipment and fuels", precisely what is paid with funds from the public coffers.