VZCZCXYZ0005
RR RUEHWEB

DE RUEHBU #1130 1371526
ZNR UUUUU ZZH
R 171526Z MAY 06
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 4578
INFO RUEHAC/AMEMBASSY ASUNCION 5537
RUEHBR/AMEMBASSY BRASILIA 5339
RUEHLP/AMEMBASSY LA PAZ MAY MONTEVIDEO 5566
RUEHSG/AMEMBASSY SANTIAGO 5141
RUEHRI/AMCONSUL RIO DE JANEIRO 1989
RUEHSO/AMCONSUL SAO PAULO 2896
RUEANHA/FAA WASHDC

UNCLAS BUENOS AIRES 001130 
 
SIPDIS 
 
SIPDIS 
 
WHA/EPSC FOR ROBERT SCHWARTZ 
EB/TRA FOR JEFF HORWITZ 
EB/TRA/OTP FOR BIRD MATTINGLEY 
FAA FOR CECELIA CAPESTANY 
 
E.O. 12958: N/A 
TAGS: EAIR ELAB ECON AR
SUBJECT: AEROLINEAS ARGENTINAS, UNIONS SIGN SALARY AGREEMENT 
 
REF: BUENOS AIRES 470 
 
¶1.  Senior managers of Spanish-owned Aerolineas Argentinas 
and leaders of the unions representing the airline's pilots 
(APLA) and mechanics (APTA) signed an agreement on pay 
increases on May 15.  Representatives of the airline have 
agreed: to increase pilots' and mechanics' base salary by 19 
percent; to maintain the so-called non-remunerative amounts 
(i.e., compensation not subject to income and social taxes) 
which the airline began to pay at the conclusion of the 
December 2005 strike; and to provide a 1 or 2 percent 
differential for seniority.  The 19 percent salary increase 
will also be extended to the unions representing the 
airline's co-pilots, navigators, and crews.  The agreement 
also includes a requirement that APLA and APTA pay ARP 10.5 
million in fines that the Ministry of Labor imposed for not 
providing the minimum required service during the November 
2005 strike (see reftel).  The pilots' and mechanics' unions 
also agreed to maintain "social peace" (i.e., no further work 
stoppages) until March 2007. 
 
¶2.  Members of APLA and APTA had demanded 45 and 75 percent 
salary increases, respectively, throughout the negotiating 
period.  Aerolineas Argentinas Director for Corporate 
Planning Daniel Burlas told Econoff that the airline's 
negotiating team walked away from the salary discussions two 
weeks earlier when "it became evident the unions had no 
genuine interest in reaching a mutually acceptable 
conclusion."  Press reports on May 16 indicate that President 
Krchner had ordered Labor Ministry officials mediating the 
negotiations "to protect the airline's employees."  Kirchner 
also ordered that the final settlement "allow the airline to 
fulfill its service obligations to avoid damages to the 
thousands of people who use the service to travel within and 
outside the country." 
 
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Comment 
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¶3.  President Kirchner may have authorized Labor to implement 
the fines totaling ARP 10.5 million on APLA and APTA as a 
disciplinary measure to discourage these unions from 
initiating work stoppages that might strand thousands of 
passengers as they did in December 2005.  The agreement 
formalizes the fines which had been discussed but not imposed 
during salary negotiations reported in reftel.  End Comment. 
 
¶4.  To see more Buenos Aires reporting, visit our classified 
website at: http://www.state.sgov.gov/p/wha/buenosaires.< /a> 
GUTIERREZ