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Cablegate: Argentina International Airport: Labor Woes, Overbooking

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RR RUEHWEB

DE RUEHBU #0064/01 0171515
ZNR UUUUU ZZH
R 171515Z JAN 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 0076
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/USDOC WASHINGTON DC
RUEHC/DEPT OF LABOR WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RHMCSUU/FAA NATIONAL HQ WASHINGTON DC//AWH-10//
RHMCSUU/FAA MIAMI SO IFO23 MIAMI FL
RHMFIUU/FAA MIAMI ARTCC MIAMI FL
RUEHAC/AMEMBASSY ASUNCION 6778
RUEHMN/AMEMBASSY MONTEVIDEO 6978
RUEHBR/AMEMBASSY BRASILIA 6661
RUEHQT/AMEMBASSY QUITO 1039
RUEHSG/AMEMBASSY SANTIAGO 1000
RUEHLP/AMEMBASSY LA PAZ JAN MADRID 1978
RUEHMT/AMCONSUL MONTREAL 0042

UNCLAS BUENOS AIRES 000064

SIPDIS

SIPDIS
SENSITIVE

STATE EEB FOR TERRI ROBL, JOEL REIFMAN, VIKI LIMAYE-DAVIS
TRANSPORTATION FOR BRIAN HEDBERG
FAA FOR CECILIA CAPESTANY, ANNA SABELLA, KRISTA BERQUIST
FAA MIAMI FOR MAYTE ASHBY, JAY RODRIGUEZ
FOR USMISSION TO ICAO

E.O. 12958: N/A
TAGS: EAIR ECON PGOV ELAB AR
SUBJECT: Argentina International Airport: Labor Woes, Overbooking
Lead to Delays and Passenger Fury


This cable contains sensitive information - not for internet
distribution.

Reftel: 07 Buenos Aires 2371

1. (SBU) SUMMARY: Flight delays and cancellations at Argentina's
Ezeiza International Airport in Buenos Aires erupted into chaos on
January 12, affecting 4,000-5,000 passengers. The conflict began
with Aerolineas Argentinas ground workers and pilots staging
slowdowns in the middle of the high summer travel season.
Initially, only passengers flying Aerolineas Argentinas' domestic
and some international routes (Chile, Spain, Brazil) were affected.
Most or all other international flights were not affected until
Saturday evening, when frustrated Aerolineas passengers caused
disturbances that led to the temporary take-over of the airport's
Immigration office, halting all travel. However, at no time was
airport or aircraft security compromised. The GOA later imposed
order, and most non-Aerolineas Argentinas flights departed with
delays. Beyond the immediate causes of the conflict - a labor
slowdown to extract higher wages - many observers contend that
under-investment, lack of aircraft, and overbooking are the root
causes of this latest problem. Aerolineas Argentinas flight delays
persisted through January 15, but as of January 16 the situation is
largely back to normal. END SUMMARY.

----------------------------
Labor Unrest Sparks Incident
----------------------------

2. (SBU) Problems began on January 10 when Aerolineas Argentinas
ground personnel initiated a slowdown in an attempt to achieve a
monthly salary increase of 1,200 pesos (about USD 390 dollars).
(Aerolineas Argentina is Argentina's flag carrier, a chronically
strike-prone, inefficient and loss-making airline in which the GoA
holds a 5%, soon to be 20%, golden share. It is owned by Spanish
travel company Marsans.) Workers noted that other airport workers
had gained such increases (also often via strikes and slowdowns),
and claim that their real purchasing power has been severely roded
in the face of high inflation. As is local custom, the slowdown was
carried out for maximum impact during the height of the summer
travel season. Aerolineas Argentinas pilots soon followed with
their own slowdown.

---------------------------
Delays and Angry Passengers
---------------------------

3. (SBU) During the first two days, affected passengers were largely
limited to those flying Aerolineas Argentinas domestic and some
international routes (Chile, Spain, Brazil), with about one dozen
flights cancelled. Most or all other international flights were not
initially affected. But by Friday night, the delays began to build
up. By Saturday, the situation became dire, affecting an estimated
4,000 to 5,000 passengers, who were forced to sleep on floors and
deal with 90 degree weather, empty cash machines, and no straight
answers from Aerolineas attendants.

--------------------------------------------
Result: Chaos, Passenger Revolt, and Takeover
---------------------------------------------

4. (SBU) By Saturday afternoon, January 12, passenger rage began to
boil over as flight suspensions mounted. Some angry travelers
turned their rage on the hapless ticket counter workers (who are
usually kept just as much in the dark as the passengers), and began
shoving them. At that point, the attendants workers' union (APA),
concerned about safety, decided to retire all of its workers, who
abandoned their workstations. This walk-off in turn caused even
more chaos, as some passengers began destroying and over-running

ticket counters and computers, all while the Airport Security Police
(PSA) reportedly did not intervene. All this drew worldwide media
attention. However, TSA contacts at Ezeiza report that at no time
was airport or aircraft security compromised.

5. (SBU) In the late afternoon of January 12, some 50 passengers
took over the Immigration area of the airport, temporarily seizing
control of all inbound and outbound traffic, including international
travel. About two hours later, Minister of Justice and Human Rights
Anibal Fernandez arrived on the scene, and after some negotiations,
order was gradually restored. Personnel from PSA, the Federal
Police, and Gendemaria began to patrol the airport. Flights resumed
Sunday morning, January 13. Eventually, most if not all
non-Aerolineas Argentinas flights departed, although with delays.
On January 14 and 15, the remaining delayed flights departed. As of
January 16, most flights were reportedly back to normal, although
reports of delays and overbooking persisted, including at Buenos
Aires's smaller airport, Aeroparque.

---------------
Who's to Blame?
---------------

6. (SBU) Most observers agree that labor demands for higher wages
are inevitable, given the high levels of inflation in Argentina and
attendant loss of purchasing power by workers. With actual
inflation widely reported to be over twice the official rate of
about 8.5%, most workers and unions are demanding nominal salary
increases of over 20% just to keep up with inflation.

7. (SBU) However, beyond the issue of wages, there are other factors
that help to explain this latest conflict. Ground handling and
pilot unions, as well as many private sector analysts, cite
Aerolineas Argentinas' overall under-investment, its "consistent
practice of overbooking amid increasing tourism," as well as its
limited transport capacity due to inadequate investment in
maintenance of the fleet. One Embassy contact actually downplayed
the union angle. He cited as the main causes overbooking and lack
of available aircraft (as a result of Aerolineas' poor financial
state and subsequent grounding of much of its fleet due to a lack of
spares).

--------------------------------------
Comment: Bad Omen for the Social Pact?
--------------------------------------

8. (SBU) A potential unintended casualty of the airport unrest is
the "Social Pact" idea that President Cristina Fernandez de Kirchner
advanced during her 2007 campaign for the presidency. She previewed
the plan as a central plank of her administration's economic policy
program, promising to organize trilateral government, industry, and
labor negotiations to address rising inflation, restrain wage
demands, and provide a stable platform for needed new investment.
Aerolineas Argentina was rumored to be the test case for such
trilateral negotiations, but the latest fiasco demonstrates the
volatility of Argentina's labor situation and the difficulty the GoA
will have in getting labor and companies to reach reasonable
compromises on wages and prices.

WAYNE

© Scoop Media

 
 
 
 
 
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