Argentina considers privatizing Aerolíneas Argentinas amid ongoing financial struggles

President Javier Milei, who took office in December 2023, is a vocal critic of the state-run airline. He argues that privatizing Aerolíneas Argentinas could alleviate government spending issues and improve the airline's fortunes.

However, past attempts at privatization have not been successful. In the 1990s under President Carlos Menem, Aerolíneas was privatized but faced significant debt and mismanagement issues. A consortium led by Iberia acquired an 85% stake in the company but later reduced it after financial struggles persisted.

By 2001, amid Argentina's financial crisis, Aerolíneas filed for bankruptcy protection before being partially rescued by the Spanish Marsans Group. The government eventually renationalized the airline in 2008 under President Cristina Kirchner due to ongoing disputes over management and sale prices.

Lessons from these experiences suggest that while Aerolíneas Argentinas can generate profits when operating as a private entity with reduced network size and costs, it faces challenges when required to maintain unprofitable routes as a public service provider.