Milton Rodriguez, president of the Uruguayan airline Pluna maintains that the company he directs must keep flying despite the cost of 22 million dollars borne by the country annually. “This cost for the State hardly counts if you compare the amount of tourism it attracts,” said the officer during an interview granted to “El País” newspaper, in Montevideo.

His words rang loudly in the ears of many Uruguayans, who indignantly raised their voices to oppose Rodriguez’s idea by means of various messages delivered to the editorial office of the Uruguayan newspaper.

Many of the people in this country are asking themselves why it is that they – particularly those who are unable to travel – must finance the trips abroad for those who can afford them.

In fact, the governments of all the countries in the world subsidize some activities they consider essential, on account of their economic or strategic importance. The railway is an example, and no citizen would consider the possibility of complaining about the benefits the government allows that means of transport even if he or she does not use what somebody else enjoys.

The problem arises when only a few are benefited.

The number of passengers carried by Pluna does not reach 500,000 annually. This figure is taken into account for each flight, so that in fact, if you count the single and return trips, the number of passengers would be no greater than 250,000 every twelve months. Out of this figure, over half corresponds to business travelers flying Montevideo-Buenos Aires and vice versa. “We might say then that each tourist carried by Pluna costs us almost 250 dollars,” analyzed a raging Uruguayan reader, who took advantage of the opportunity to rail against the international airport of the capital of Uruguay as well.

“With half that amount (the 22 million dollars that the State spends yearly to keep Pluna going), the Tourism Minister Pedro Bordaberry should be able to get at least another ten airlines to operate in Uruguay. With the other half, the urgently needed remodeling of the disastrous Carrasco airport could be paid for in ten years,” the reader stated vehemently.

It is difficult to attract some ten airlines interested in landing in Uruguay with just eleven million dollars, but the citizen’s opinion reflects the generalized discontent over the administration of Pluna, which only two years ago was on the edge of a technical bankruptcy.

In March 2002, the Ministry of Transport and Public works in Uruguay, admitted through a document sent to the government that Pluna had been almost in a situation of “technical bankruptcy, though the crisis did not reach the level of Aerolíneas Argentinas thanks to the understanding of the officers’ trade unions, which granted credit to the negotiations that were being carried out”.

According to the annual report of 2001 submitted by the Uruguayan Executive to the Parliament, “the regional condition of recession has determined a decrease in Pluna’s income and the increase in the price of inputs, added to the losses of previous fiscal years have shaped the situation of technical bankruptcy and the need to review the company’s bookkeeping, which is in the process of being accomplished.”

According to statements from the present Pluna president to El País newspaper, when he took office in January 2001 he found an accumulated debt of 54 million dollars and a deficit of a further six million for the current fiscal year, which was due to close the following June, six months later. “Within that debt, we owed Varig around 30 million dollars for rent and maintenance of planes,” he explained.

The relationship between the Uruguayan state and the Brazilian airline Varig and the Pluna shareholders was not the best at that time. Even today, Milton Rodríguez assures us that the compromising economic situation faced by the airline he directs is due “mostly to poor administration and not doing the right thing at the right time. The leasing contracts were bad business for Pluna. Today, there are three planes owned by the company that are well maintained, but there used to be another two (1973 Boeing 737-200s) leased from Varig, which were not well maintained and flew 65% of the time, while for the remaining 35% they were unproductive and idle in a workshop, spending money on spare parts and labor”.

Now Rodríguez recalls that “due to these figures we had a conflictive and tense relationship with the Varig representatives on the Board of Directors. We reproached one another for three or four months over how we could have possibly got into this situation and we found no logical answer. At one point there was such tension that we thought of taking drastic measures, including those at a legal level,” he says.

The current doubt is why, if the figures were so bad and some irregular conduct had been detected in the administration of the company, nothing was reported to the Law for investigation.

But that is another matter... Or would it be better not to go too deeply into Pluna’s figures?

In August 2001 already, the Uruguayan minister of Transport and Public Works, Lucio Cáceres, currently holding the same office, explained during a dinner in glamorous Punta del Este that his government’s policy is one of open skies, but added “we have to admit that Uruguay does not have the size for too many airlines and that is the reason why the market does not function properly. Then, the answer would be to have a regulating policy, because if we were to set Pluna to compete against another company tomorrow, the two would simply die out. We need to be practical and find other ways”.