"This year will be worse than the previous one," said President of Aerolineas Argentinas

"The current rate level puts the finances of the company under control." Thus, without euphemisms, the president of Aerolineas Argentinas, Luis Malvido, spoke today during a meeting with journalists during which he presented the new candidacy of the company.

The executive said the national carrier's deficit would be worse this year than the 2018 –
year in which it received $ 200 million in subsidies and lost nearly $ 22 billion – and hoped to improve its profits by strengthening "non-airline services", which now account for 10% of the company's revenues and will seek to triple with the launch of new products.

Malvido referred to the "aggressive competition" within the sector – where he put more emphasis on Latam – and badured that, in this context, "none of the international links is profitable". He mentioned, as an example, the price of the ticket offered by some competitors for the connection to Miami, of about 500 US dollars, and stated that one of the problems is that it is not not temporary promotions, but tariffs maintained. "This is what strongly questions the profitability of all our international destinations," he summarized.

As for the figures with which it will close this year, Malvido – responsible for the company since last July – has stated that it expects them to be worse than those expected at the end of 2018, year-on-year. during which time the company lost $ 15,400 million more than in 2017. "This is going to be worse than last year, we still do not know how much," he said before that a question of
THE NATION.

"Every month we struggle to keep up with the pace of vendor payments and salaries, it becomes difficult for us and we need huge support from the national treasury every month," he said. -he adds.

According to the executive, competition is not the only factor that affects the accounting performance of the company, but also external factors. Basically, the appreciation of the dollar, the currency in which it pays most of its inputs and financial commitments.

As an "optimistic face", Malvido pointed out that the company is increasing the volume of pbadengers and that in a context of market growth (22% in June, according to Malvido), it had lost "a small market share".

New services

As an alternative to this delicate financial context, Máximo Amadeo, commercial director of the company, said one of the strategies is to "diversify revenues". The company aims to strengthen the "non-airline services" it proposes, which currently earns 10% of its total profits and which, according to Amadeo's calculations, could triple.

As part of this strategy, the launch of two new services is localized. On the one hand, Aerolíneas Argentina offers a cargo transportation service from Miami, accessible via the Aerolíneas Cargo website, which charges a commission for the delivery of a package within a maximum of four days. "There are two flights a day for which we could bring 28 tons a day," Amadeo said. According to his calculations, this freight could represent between 15 and 20 million dollars a year. "For the company, it's nothing, but for a line costing between $ 100 and $ 120 million a year, that's a lot," he said.

Amadeo said the service "would explode" and pointed out that for two weeks it was in force – without official launch or promotion – 1,000 shipments had already been made and 12,000 people had registered to receive it .

But Aerolineas Argentinas also wants to generate the same air cargo service in the country, but through the launch of an application. They want to somehow function as a "fast connectivity nervous system in Argentina". A kind of Rappi or aerial Glovo which points all over the national territory. They said, this application will be available in a few weeks.

There are also other non-airline services, such as selling miles or maintaining equipment provided by other companies. In addition, there will be other developments in the company, such as the repositioning of the alliance with Banco Galicia that will make the difference with the Quiero! can be exchanged for tickets. As stated by Amadeo, the company has not stipulated to hire new employees for the new services. "The mandate is to do more with what we have," he summed up.

The novelties were given as part of the presentation of the new application of the company, which responds, as they say, to the top of a pyramid of digital transformation that aims to generate more and more self-management opportunities and improved user experience. – they no longer need, for example, to make eight clicks to buy a ticket, but three – which is in addition to other actions such as the development of the new website, active since May latest. "This is a step that is part of a digitization process that requires more than two years of work and a $ 70 million investment," they said.