VZCZCXYZ0000
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