The Aerolíneas Argentinas And Austral Merger Moves Closer

Aerolíneas Argentinas management inked a deal with its pilots and pilots from fellow state carrier Austral, edging closer on the merger the Argentinian Government announced in May. What else do we know about the union? Let’s investigate further.

An Austral Lineas Aereas Embraer 190 seen ready to leave-getty
Aerolineas Argentinas and Austral are merging together. Photo: Getty Images

Argentina is nearing the merger

The pilot unions of Aerolíneas Argentinas and Austral weren’t too happy with the proposed merger. Austral pilots saw the merger as unnecessary, as the small regional carrier had been operating in the country for over 60 years.

Both parties were also worried about how the merger was going to happen. Were they going to lose their jobs? How were the pilots of both companies would work under one same brand?

Now, Aerolíneas Argentinas shed more light on the subject.

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Pablo Ceriani, Aerolíneas’ CEO said,

“Yesterday, we took a step forward to the merger of Aerolíneas and Austral. We reached a deal with the pilots of both companies that ends the disagreements inside our carrier.”

According to Aerolíneas, the pilots will now be represented by one union. Their work will also be developed under the same rules, and the seniority they had either in Aerolíneas or Austral will be valid under the new carrier. Nevertheless, there’s still no date as to then the merger will happen. In May, Aerolíneas said it would be complete by the end of 2020.

The Aerolíneas Argentinas And Austral Merger Moves Closer
Both carriers would operate under the Aerolineas Argentinas brand. Photo: Getty Images

What are both carriers winning with the merger?

In May, Ceriani said that the fusion would bring a more significant operative efficiency to both carriers. He added that Grupo Aerolíneas would have savings of up to almost US$30 million and direct earnings of US$42 million.

Additionally, Grupo Aerolíneas is developing two new businesses. The first is an MRO, which would allow the State company to provide maintenance to other airlines in the region. Aerolíneas will also launch a cargo business, seizing on the experience it has had in the last few months. Due to the pandemic, Aerolíneas has operated flights to destinations it has never been before, like China.

Ceriani added,

“At the start of the pandemic, we established two objectives: put our companies at the service of the country, with humanitarian and cargo flights and establish the necessary transformations to improve productivity and overcome the worst crisis of the airline industry.”

Since the pandemic, Aerolíneas Argentinas’ profit has fallen almost 100%. The other carriers in Argentina, like Austral and Flybondi, are in the same situation. LATAM Argentina ceased operations.

Aerolineas Argentinas fleet modernization getty images
Aerolíneas Argentinas launched operations in 1950; Austral was born in 1971. Photo: Getty Images

A bit of history of Aerolíneas and Austral

Aerolíneas Argentinas launched operations in December 1950. Meanwhile, Austral has had two stints. Meanwhile, the first Austral flew in 1957. This company merged in 1971 with Aerotransportes Litoral Argentino, creating Austral Líneas Aéreas.

Currently, Aerolíneas Argentinas has a fleet of 54 aircraft composed of ten Airbus A330 and 44 Boeing 737. Meanwhile, Austral has a fleet of 26 Embraer ERJ-190.

Before the pandemic, Aerolíneas Argentinas served 37 domestic destinations and 24 international destinations in 16 countries. Austral mainly had domestic destinations, although it does connect with some neighboring countries such as Uruguay, Brazil, and Chile. Nevertheless, both carriers have been grounded for more than six months now due to Argentina’s government restrictions. Maybe they will fly the following week again.

What do you think of Aerolíneas and Austral merger? Let us know in the comments.