Because of "limitations on the scope" of its work and situations of uncertainty detected, the General Audit Office (AGN, for its acronym in Spanish) decided not to review the financial statements of 2008 of the Austral Airline.

The disclaimer of opinion is when technicians cannot assess whether the economic and financial indices of the audited entity are reasonable. Within the spectrum of findings of the AGN, abstention is at the negative end, together with the adverse opinions, while the other side contains reports with caveats, where there are exceptions which prevent an entirely positive-trial, and favorable. However, the audit was not the only one who took that decision on Austral’s numbers: private consulting firm Price Waterhouse & Co SRL reached the same professional opinion on the financial statements of 2007.

When the AGN speaks of "limited in scope" of its work, it refers to circumstances that do not allow their technicians to apply the professional procedures necessary to say with a reasonable level of security, in this case, on the data emerging of the financial statements of the airline.

For example, one of these limitations is that Austral became "only a service provider of Aerolineas Argentinas" which performs commercial and administrative operative, and records all tickets issued and pending use. So much so, that according to the audit "there is no separation of control of functions or opposition of interests" because the tasks of the two companies are performed by "the same personnel."

Something similar happens with inventory management. "The transfer of aeronautical materials between companies is managed by the same business," said the Watchdog. And besides, "it is not possible to identify the assets that comprise the book spares inventory balance of $36,071,751," because it is not backed by a physical inventory.

As for the identified uncertainties, the Audit says it cannot estimate the effects that cause the expropriation process initiated in 2008 with the implementation of Law 26,466, which declared a public utility both Aerolineas Argentinas as well as Austral and its subsidiaries: Opt SA, Jet Pack SA and Aerohandling S.A.

The report of the AGN, approved this year, also notes that the uncertainties are conditional on the measures taken by Austral to achieve economic and financial viability, and on time, "the resolution by the shareholders of the situation of loss of capital, and the final decision regarding the ownership of the shares of the Company."

In numbers, on December 31, 2008, the financial statements of Austral had a net loss for the year of $284,419,236, and an accumulated negative result (of that year) of $381,044,491.

Also by that date, the Federal Government transferred $ 931,556,682 to meet current expenses. A year later, the financial assistance amounted to $3,141,892,648, which was used for salaries, fuel and other operating costs.

Subsidiaries

Austral Airlines and Jet Pack controlled companies, engaged in the transportation of cargo and mail air, and Aerohandling, serving ramps and what is known as handling, care of aircraft and passengers ashore.

The Watchdog said neither controlled firms has its own organizational structure "nor necessary to fulfill its material mission."

All loading operations of Jet Pack are billed by Aerolineas Argentinas, which assumed responsibility for providing that service. In addition, the firm billed the two airlines' costs in staff-consuming," says AGN.

On the other hand, it depends on a homonymous Aerohandling management operating within Airlines structure. In fact the elements he works with, wagons, containers and ladders, are the property of the flagship airline. Aerohandling revenues correspond to invoices issued to Austral and Aerolineas for staff costs but, according to the Audit, "there is no agreement to endorse such billing."

The AGN for both companies Aerohandling as well as Jet Pack had "uncertain circumstances" and, after analyzing its financial statements of 2008, the conclusion was the same as in the case of the airlines: disclaimer of opinion.

​