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Uruguayan Trade Union Federation Backs Launch of Worker-run Airline

alas-uruguay

Photograph published by Jimmy Baikovicius on Flickr under a Creative Commons licence (CC BY-SA 2.0)

[Links to English language web pages are indicated by [en]; all other links lead to Spanish language web pages]

The Uruguayan national trade union federation PIT-CNT [en] has come out in support of the new Alas Uruguay [en] airline by investing union resources into the project after the airline's launch suffered numerous setbacks.

The PIT-CNT (Intersyndical Plenary of Workers–National Convention of Workers) has shown its solidarity with Alas Uruguay due to its status as an autonomously administered company consisting of ex-workers of the previously state owned airline PLUNA [en]. With the Uruguayan government no longer able to meet the airline's growing debts, Pluna was liquidated in mid-2012 after 76 years of service. 

However, in November of this year the Supreme Court of Justice ruled that the law allowing for the liquidation of Pluna, which saw seven of the its aeroplanes handed over to trustees and special treatment awarded to certain creditors, was unconstitutional. As a result, Alas Uruguay’s plan to buy three of the seven Bombardier planes held by trustees has returned to Earth with a resounding thud after the court’s ruling led to the suspension of a previously approved loan by the development fund FONDES.    

As Alas Uruguay officially state on the website of Portal de Américas in the article “Alas Uruguay rompe el silencio” [Alas Uruguay break the silence], this has delayed the awarding of mandatory certificates from the National Civil Aviation and Aviation Infrastructure Directorate which could further hinder the airline’s launch and leave workers unable to meet the numerous financial commitments made in recent months. 

Maintenance of the aeroplanes has been carried out by ex-employees of Pluna with the aim of keeping them operative as even a short break in upkeep leads to the withdrawal of airworthiness certificates. This would result in an immediate fall in their sale price.

In addition to the failed attempt to purchase the three aircraft, Alas Uruguay has already registered as a Public Limited Company having incorporated its managerial staff. According to statements made by the company, office spaces have already been let, bank accounts have been opened, documents have been submitted for the insurance of aircraft (including to Uruguay’s state owned insurance company), websites have been designed and telephone services put in place. Furthermore, the General Manager recently made a presentation before an International Forum on aviation and preliminary talks were underway with national and international service providers.

One particularly worrying detail, however, is that by not finalising the creation a new airline, the government has to continue to pay workers unemployment benefit for a period of two years in order to cover expenses and loss of income. Estimates suggest that this could end up costing the government in excess of US $20 million without any chance of the sum being recovered.

Leo Pintos (@huesopintos) ironically tweeted:

Uruguay 2030: Alas Uruguay workers demand unemployment benefit for ten more years.

Jose Pedro Urraburu (@urraburu), on on the other hand, declared himself against continuing to pay income support:

#Plunagate and its baby #AlasU: The state shouldn’t be paying unemployment benefits to merged companies. Pay layoffs, now

Despite accusations, workers have stated that they are financially committed to Alas Uruguay, alongside PIT-CNT who have also made guarantees for the realisation of the project. Furthermore, workers of Alas Uruguay have given 25% of their salary to the company as a means of financing the venture.

With regards to the Pluna aeroplanes, if these are not subject to constant maintenance then were they to be sold it would be for a drastically lower price than the US $15 million per plane previously agreed with Alas Uruguay.  

The Minister of Economy and Finance, on the other hand, has stated that he is not aware of any law that allows for the state to act as guarantor for a private company in which it does not have an active participation. Indeed, the Uruguayan government is already paying a fee of US $8 million every six months to Scotiabank in its role as guarantor of the seven Bombardier planes that were acquired by the former Pluna CEO, Matías Campiani [en], in 2008. Consequently, if Alas Uruguay does not keep up with its payments then the government would be liable to Pluna’s creditors thus creating a type of ‘double guarantee’ on the same aeroplanes.

The Uruguayan president, José Mujica, in a recent speech spoke about the possibility of the government financing the venture, saying: “I would ask that people have a little bit of heart because the PIT-CNT is even offering part of its monthly income as a guarantee. The Government, if it can, will take that step.”

The senator Alfredo Solari (@senadorsolari) commented on this statement, saying:

Mujica: “People should have a little bit of heart over Alas Uruguay” In the meantime, we’re all paying for it.

In their article “Alas Uruguay más cerca del despegue” [Alas Uruguay, closer to take off], the tourism website TurisUY stressed the importance of this project in kick starting the local tourist industry while also benefiting Uruguayan travellers who are currently paying over the odds for airfares.

The upshot of the closure of Pluna and the delay to the launch of Alas Uruguay has been reflected in an increase in airfares for flights to and from Carrasco International Airport [en] which has ended up benefiting BQB [en], a rival airline run by the Argentine entrepreneur Juan Carlos López Mena who, coincidentally, has since been implicated in Alas Uruguay's failed attempt to buy the Pluna aircraft.

The economist and broadcaster Laura Raffo (@lauraraffo) commented on a photograph published by the Uruguayan newspaper El Observador in which López Mena and his son Juan Patricio can be seen lunching with the Minister of Economy and Finance, Fernando Lorenzo, and Hernán Antonio Calvo Sánchez, the vice-president of the Spanish airline Cosmo, saying:

Great photos of the López Mena – Lorenzo lunch!! Some surprised faces and some poker faces :)

One of the leading newspapers in Uruguay, El País, in their article “Aerolínea de López Mena sumó 56 vuelos tras el cierre de Pluna” [López Mena’s airline adds 56 flights after closure of Pluna], claim that in “the year and a half since the closure of Pluna, López Mena has not only expanded his river transport business [en] [that connects Uruguay to Argentina] but has also seen a significant growth in his airline business.”

The official Twitter account of Alas Uruguay responded by saying:

businessmen like this should be sent back to their country with their tail firmly between their legs. Obviously after having been arrested!!!

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