Bolivia's main private airline AeroSur in doubt

AP News
Posted: May 14, 2012 7:27 PM
Bolivia's main private airline AeroSur in doubt

Bolivia's principal privately owned airline, AeroSur, was down to a single domestic route Monday and hoping for an infusion of capital to stave off bankruptcy.

U.S. mining investor William Petty was in talks with company executives after proposing to make an investment without assuming any of the airline's debts, which exceed $20 million. Petty is a shareholder in Franklin Mining Inc. of Colorado.

A representative of the airline's owners, Sergio Asbun, told The Associated Press that they were analyzing an offer from Petty but would not offer details.

A dozen AeroSur workers declared themselves on strike Monday at La Paz's international airport, saying they were going on a hunger strike, union leader Elias Quispe said. The company has more than 1,000 employees and Quispe said none have been paid for at least three months.

AeroSur's troubles were complicated in March when a court ordered that 100 percent of the company's revenues from ticket sales be seized by Bolivia's tax agency to cover unpaid taxes.

Beginning in January, AeroSur suspended nearly all its flights.

Until December, it had 26 daily flights with leased planes on routes within Bolivia and to Buenos Aires, Argentina, Sao Paulo, Brazil, Miami, Florida, and Madrid, Spain.

Now, the company can't afford jet fuel, Vladimir Sanchez, Bolivia's public works minister, said recently. He said the government would not help the airline until it pays its debts, makes its finances more transparent and defines a restructuring plan.

The airline's crisis exposed tensions between investors with blood relations.

The company's president, Sergio Sanzetenea, accused his half-brother and predecessor in the job, Humberto Roca, of embezzling $37.2 million from the company. Roca says Sanzetenea misappropriated stock.

Roca has lived in Miami since leaving Bolivia last year when the government of President Evo Morales accused him of illegal enrichment. Sanzetenea lives in Argentina.

AeroSur began in 1992 after the collapse of state-run flag carrier LAB Airlines and it expanded market share until Morales launched state-owned Boliviana de Aviacion two years ago.

The state company lowered ticket prices to woo customers from AeroSur, which accused it of using government subsidies to undercut its private competition.