Could Be Worse

Is the grass always greener on the other side of the baggage cart? It depends. But here are two items that may make your side look better:

  • LAN Airlines suspended its flights in Argentina for one day last month due to a contract dispute with its one-and-only ground handler, the state-run Intercargo.

Back in 2010, Argentina’s government helped prop up another state-run business, in this case, Aerolinas Argentinas, by passing a law that gave the ailing flag carrier priority to use all the country’s passenger bridges.

LAN found a way to work around the law – one reason may be that it contracted with Intercargo.

But the relationship fell apart earlier this year over prices. Afterward, Intercargo took away the boarding bridges. And since the airline couldn’t use the bridges, the planes were parked remotely, which meant passengers would have to take buses back and forth between terminal and plane.

Then, Intercargo said they wanted more money despite signing a contract into next year, and complained in the press that LAN pays 40 percent less than other carriers for the same services.

“No other company has benefitted as much in recent years,” Intercargo said in a statement. In other words, do cry for me, Argentina.

Eventually, Intercargo stopped providing much of anything to the airline. Not even buses to transport the passengers.

But LAN planes were soon back in the air after both airline and ground service provider reached some type of an accord. What the terms of that deal are, however, remain a mystery. But you have to figure that its one-day “boycott” wasn’t going to work against a state-run monopoly.

We could only find this report that says the airline vowed to “pay its debt” and pay Intercargo “full fares.” And those full fares? LAN sources said Intercargo charges the highest fees in the Americas, a natural tendency when you’re the only company in town.

  • At press time, we heard better news for Swissport over a prolonged legal battle, which we wrote about in our May issue (“Swissport Loses Out In The Ukraine … For Now”).

Ukraine International Airlines and its main shareholder, Aaron Mayberg, took the ground service provider and its former joint venture partner to court after majority shareholder Swissport may … or may not … have mentioned a plan to increase its capital into the JV, Swissport Ukraine, which Swissport may … or may not … have actually done.

Two Ukraine courts agreed on the “may” and handed the whole company over to UIA, but did so in such dubious fashion that the jury – not that there was one – may still be out on the “may not.”

After Swissport put diplomatic pressure on the government, officials keen to integrate with the European Union launched a committee to investigate “looting and expropriation” and met twice with Swissport.

Finally, the highest such appeals court in the Ukraine will open hearings in June on the legal decision that allowed UIA to take over a $30 million operation for a mere $400,000.

Loading