After ten years of management of the company Iberia in Argentine Airlines (ARSA), between 1990 and 1999, the flagship airline had "losses that were incurred due to dissolution and liquidation Under Argentine law," according to a report by the Court itself of the Spanish Accounts.
When that time was averaged, the General Audit Office (AGN, for its acronym in Spanish) analyzed the investments Iberia made in infrastructure and services, incorporation of aircrafts and spare parts between 1990 and 1994. For the three items, the Spanish firm should have allocated $683,865,000 dollars, but only spent $268,258,825, 39.2% of the amount committed.
The watchdog divided its work into two periods. First, it worked on the commitments made by Iberia since the privatization in 1990 until July 22, 1992, when the Government agreed to appoint a "substantial stipulated in the tender offers and contract modifications."
At that stage, Iberia joined the first plane "with a delay of 16 months in respect of deadlines," says the AGN. But then, this aircraft was sold for reinstatement to the fleet through a lease with option to purchase. As for the parts, the company spent $939,056 although their initial commitment was of $2,696,424. About infrastructure and services, Iberia computed as "investments" $16,551,620 in leasing and $7,376,339 in rent. The AGN report says that "incorporating the concepts of leasing and rental in respect of personal property is not clearly permissible under the documentation Investment Plan."
The lack of investment, coupled with other failures recorded in those two years, they allowed the possibility of punishing the company under Articles 26 and 27 of the Statement of Concession, i.e. the execution of guarantees or revocation of the national airline rights. But none of these measures were applied.
Moreover, the inspection body audited what happened between July 22, 1992 and March 30, 1994, the day the Argentine Government authorized Iberia to increase the share capital of airlines and, in turn, reduced its participation in the airline to 5% of the share capital and removed its veto in certain administrative decisions of the company (See Aerolíneas Argentinas and lack of control by the State).
Until this agreement, Iberia should have incorporated 11 aircrafts, but only had six. Of that total, it used a lease method for three aircrafts and although it bought the other three, it then sold them and also rejoined through leasing. In numbers, the company invested $184,763,207 representing 43% of the amounts committed to the field. While infrastructure and services, the firm should have spent $25 million, it paid 76% less than expected: $6,577,168.
The AGN report adds that Iberia did not enter "any of the 36 international destinations included in the investment plan" and, as for domestic flights, the "lack of effective control" was recorded in the performance of services. In fact, "it only considered the delays in departures and / or arrivals at Aeroparque Jorge Newbery Metropolitan" and lacked information of the remaining airports in the country. In addition, the Audit found a "significant decrease in the frequency of services" on some scales. Finally, the control body found upon their work a "summary for non-working nine routes granted to Aerolíneas Argentinas", in which the Directorate of National Airline Transportation tried to determine whether or not to culminate the concession.