erolineas Argentinas offers its corporate travel customers a handy device called aerodolares that allows companies to keep track of their spending and flying with the Argentine flag airline. That's the kind of financial management Argentina's national airline itself could use in overseeing its own operations as it struggles through a painful restructuring and perhaps worse.

Troubled enough in good times, Argentina's aviation industry went into full disarray last month as Aerolineas Argentinas dropped half its international schedule as the country's economic slump took hold. The airline was weighed down by debt that was approaching $1 billion and the owners, an arm of the Spanish government called State Industrial Holdings Co. (SEPI), faced labor turmoil from unions that claim the restructuring exercise is aimed at stripping the airline down for a sale.

At the same time, the country's second-largest carrier, largely-domestic LAPA, filed for protection from its creditors as that carrier's finances crumbled under the same rising fuel costs and growing competition from North America that have plagued Aerolineas Argentinas.

LAPA dropped its only flights to the United States in December when Delta Air Lines put a plane on the same Atlanta-Buenos Aires route, and planned new routes to other U.S. cities are endangered. The airline says its fuel costs tripled last year after doubling in 1999, adding a big hit to LAPA's bottom line just as passenger ticket taxes were hiked and Argentina's two-year-old recession crippled consumer spending.

Foreign Competition

It should hardly be that way for airlines that have a large home market that has been genuinely prosperous for the past decade. Yet most of the growth in Argentine traffic has come on foreign airlines that have been adding flights to Buenos Aires in growing numbers. Yet, the Argentine carriers are among many South American airlines that are stumbling financially under the greater competition from financially-strong North American operators. "I think the problem is many of those airlines are held back by a history of extra people compared to what they need and by unfavorable labor contracts," said one Latin American airline executive.

Argentina's airlines haven't been helped by the country's relatively poor position in international trade. Despite a large, albeit flagging domestic economy, Argentina accounted for only about 10 percent of South America's trade with North America, ranking behind Colombia, Brazil and Chile and not far ahead of far smaller Peru and Ecuador.

The International Air Transport Association's freight forecasts for the country project barely any air cargo growth over the next couple of years, suggesting Argentina's carriers shouldn't expect much help from their bellies in any restructuring.

At Aerolineas, the decision by an arm of the Spanish government to end some of the international service was turning into a political battle. Argentina's government said it was investigating what a cabinet official called a "serious and worrying situation."

The immediate concern was the end of flights to Miami, New York, Los Angeles, Auckland, Sydney, Rio de Janeiro and Sao Paulo. Government officials said they might auction off the rights to those routes if Aerolineas does not use them.

But the long-term question remained whether the government might move to save the airline with a cash infusion or whether it would simply let market forces take hold, even if those forces bring down an airline. That's not a result most governments would allow for a state-owned airline. But then, the government that owns Aerolineas Argentinas isn't the airline's own government.

Uprooted Floras

he heavy rains in South America over the winter preceded a flood of springtime bankruptcies that have uprooted the Miami flower scene.

In quick succession this spring, import giant USA Floral filed for Chapter 11 bankruptcy protection and its transport supplier, the Colombian-owned but Miami-based Aerofloral, struggled to stay open despite deep financial problems and the loss of its leadership. Former Aerofloral President Hernan Galindo formed a new operation, Latin Air, near Miami International Airport with the apparent help of another startup, an airline called Southern Air whose sole operation appears to be two 747s that fly between Miami and South America on behalf of Latin Air.

Galindo, executives at Southern Air and at Aerofloral did not return repeated calls for clarification, but clarification has never been a prime commodity in the lively cargo community in Miami that handles much of the flower imports that come into the United States from South America.

The poor returns of USA Floral Products, a conglomerate that had grown rapidly through acquisition in recent years, appeared to be the catalyst for the Miami upheaval. The company reported $884 million in revenue last year, but lost $189 million and appeared to be wounded when poor weather cut into Colombia's flower exports at the beginning of 2001. According to cargo industry sources, that helped push Aerofloral several millions of dollars into debt with its aircraft provider, Atlas Air, before Atlas finally pulled the plug on the troubled Aerofloral lease this spring.

Still, U.S. Department of Agriculture figures show overall flower imports into the United States through the first five months of 2001 were up 8.3 percent, even after a poor start to the year. In flower shipping, timing is everything.

... Briefly

The Colombian government rejected the proposed merger of the country's two struggling airlines, ACES and Avianca, on grounds that consumers would be harmed. ... Copa Airlines of Panama started non-stop flights between Quito and Panama. … Varig Brazilian Airways started non-stop service from Los Angeles to Lima six times weekly, with the flights going on to Sao Paulo. … Flight attendants staged a one-day strike at Aeromexico, which handles 42 percent of all flights in Mexico. … United Parcel Service expanded its express services out of Guatemala, Honduras and Colombia with its day-definite Worldwide Expedited service. … ICCS Mexico opened its 13th fixed-based operation in the country, a facility in Tampico, Mexico. … The new version of Pan American Airways launched 727-200 flights between San Juan, Puerto Rico, and Orlando. … Venezuela's Vensecar International Airlines, which is partly owned by DHL, wet-leased a 727-200 freighter from Capital Cargo International Airlines to start service between Miami and Venezuela. … Danzas acquired Colombian forwarder Florcarga, a former agent for Air Express International, and will integrate the business into Danzas SA. …Toyota, the third-largest automaker in the world, said it will sell cars in Mexico starting Jan. 1, 2004, when new free trade provisions are implemented and said it is evaluating whether to open a plant in the country. … Mexico's government put off the planned sale of the country's two airlines, Aeromexico and Mexicana, until at least the end of the year. … Brazilian Internet company Promon will offer the Viewlocity Integration Broker supply chain management software in Latin America. … The U.S. Department of Transportation gave Gemini Air Cargo until July 22 to start flights to Ecuador after the DC-10 freighter operator said the Ecuadorian government has delayed its regulatory approval. … TACA Peruupgraded its intra-South America service to A320 aircraft. ... Air Jamaica will start nonstop service between Montego Bay and Washington Dulles in November.