Aerolíneas Argentinas S.A. | New Investors in the 1990s
New Investors in the 1990s
As costly as it proved to Iberia, AR still controlled one-third of South America's air traffic, making it a somewhat attractive investment to global competitors. Since Iberia needed government subsidies for its own survival, the European Commission mandated that it reduce its holdings in AR. Merrill Lynch and Bankers Trust bought into the company in 1996, and American Airlines parent AMR Corporation beat out Continental to take a 10 percent share of Interinvest, AR's holding company, in 1998.
The number-crunching methodology of American Airlines (AA) brought quite a culture change to the airline, accustomed to decidedly less formal decision-making. AA managers immediately set out to reduce short-term debt of about $700 million and slashed the payroll. They also used AA standards to improve customer service, starting out a process that could make AR eligible for membership in the OneWorld global alliance. Reducing the number of...
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