Argentina accused American Airlines Thursday of generating uncertainty in its economy by restricting ticket sales bought in the South American country to within 90 days of travel. The airline has not explained the measure, but analysts suggested it was linked to fears of a depreciation amid a widening gap between the official and informal exchange rates for the peso.
Foreign companies are paid in pesos and must convert the money to dollars at the official rate. But cabinet chief Jorge Capitanich blasted the decision as "aimed at generating uncertainty in Argentina," where he insisted, "there are all the conditions for macroeconomic stability." The head of state airline Aerolineas Argentinas, Mariano Recalde, noted the US airliner was the only company to take such a measure. "It may be politically motivated," he told local media, saying "there is no context that justifies it."
American Airlines has a 30 percent share of the flights between the United States and Argentina, while the state-owned company has a 16 percent share, Recalde said. The move by the US airline coincided with remarks by the acting American ambassador that it was "important for Argentina to exit default as soon as possible to return to the path of growth and attract the investment it needs."
On Wednesday, Economy Minister Axel Kicillof warned Argentina was facing "a speculative attack on the peso," and that some were "trying to create panic" in the context of a debt battle between Buenos Aires and hedge funds demanding full payment on $1.3 billion in bonds that Argentina defaulted on in 2001. Even though Argentina persuaded the vast majority of its creditors to accept 70-percent losses on the face value of the bonds, a US court ruled that the two holdout hedge funds must be paid in full.
The dispute over air travel has echoes of an ongoing confrontation between international airlines and cash-strapped Venezuela, a close ally of Argentina. International airlines have cancelled or drastically reduced flights to Venezuela in response to the government's failure to reimburse them for $4.1 billion in ticket sales made in the local currency.