Brazil & Southern Cone - November 2012 (ISSN 1741-4431)

The economy and transport ministers, Fernando Lorenzo and Enrique Pintado respectively, were hauled in front of the senate on 29 October to explain the fiasco surrounding the bankruptcy of the national flag carrier Pluna in July and the failed auction of seven of the company’s planes. The opposition Partido Nacional (PN, Blancos) and Partido Colorado (PC, Colorados) had presented a motion calling for the resignation of the two men, as well as the president of the Banco República, Fernando Calloia, because of the lack of transparency surrounding the auction. The motion was narrowly defeated because the ruling Frente Amplio (FA) has a 16-15 majority. PN Senator Carlos Moreira said the auction had turned into “a soap opera” and was “compromising the country’s prestige”.

In July 2007, Leadgate Investment bought a 75% stake in Pluna, while the Uruguayan government maintained a 25% stake. Pluna promptly acquired seven 90-seat Bombardier CRJ-900 aircraft. In April 2010, despite the severe pressure on airlines in the wake of the subsequent global economic downturn, Pluna placed an order for a further seven Bombardier jets at a cost of US$200m. The acquisitions failed to turn around the company’s fortunes. In June 2012 the government reached an agreement with Leadgate, under which the company agreed to leave the airline in an “orderly fashion” to allow the State to find a more suitable partner.

In July the government decided to liquidate Pluna. It sold off seven planes in an auction in early October to the little-known Spanish airline, Cosmo Líneas Aéreas for US$137m, and leased six planes in order to raise funds to pay off the company’s US$300m debt. However, Cosmo pulled out of the purchase, claiming it did not have enough capital and the future of the planes, and the company’s 700 employees, is now up in the air again. There was some talk that Uruguay’s BQB Líneas Aéreas (Buquebús) would step in, and the carrier’s workers’ union is in talks with the government about establishing a workers’ cooperative to run the company with government subsidies.