Evening star., 1945-11-10
Argentina S AirIines
Placed Under Federal
Control in New Code
b the Associated Press.

| Bs the Associated Press.
BUENOS AIRES, Nov. 10.-The
The Argentine military government
has taken virtual control Of CONF
mercial aviation within the country
through civil aviation code hailed
as putting the public interest above
the stockholders.
The new code, imposed by decree,
is not expected to affect greatly
present operations Of the foreign
airlines such as Pan American
Grace, Panair do Brasil and COM
panies running planes to Asuncion
and Montevideo. These will have to-
stop carrying passengers between
points within the country or else
submit to the new code, 1t is prob
able they will carry only interna-
tional passengers.
The plan calls for six zones of
influence" with one airline domi-
nant In each zone. The chosen air.
line would not have a monopoly in
its zone, but would be given prefer
ence In granting new routes.
The government will supply 20I
per cent of the capital of the air.
lines to be formed under the plan.
Bonds cannot be issued for a total
of more than 20 per cent OF the
capital stock without government
approval.
Restrictions Outlined.
Only native-born Argentines can
be stockholders and stock cannot be
resold to foreigners. All bondhold-
ers also must be Argentines. No
stockholders can own Simultaneous
ly shares in any ship, railroad or
truck line
Each hairline is limited to board
of directors of six members, includ-
ing the president and vice president
named by the government. These
nominations must be approved by
the senate. The private stockhold-
ers can elect the other four directors
and the manager.
The law gives the government
power to suspend the directors
elected by the private stockholders
when their actions are against the
public interest" Stockholders are
then allowed to elect new ones.
The president and vice president
also are empowered to veto any
action of the other directors when
considered contrary to the public
interest" However, If the govern
ment does not confirm the veto
within 80 days, the action may still
be carried through.
All previous airline subsidies and
all exemptions from taxation are
Cancelled by the new law, in return
for guaranteed per cent dividend
On the other hand, the government
frees the airlines from requirements
that they carry government mail
free and give government passengers
so per cent rebate on fares.
Government to Fix Fares.
The government will fix airline
fares, setting them to give a return
of between 4 and 10 per cent on the
capital invested Any profits up to
per cent go entirely to the share
holders. Profits between 4 and 10
per cent are divided: Up to S per
cent of the excess as bonuses to
the directors, 20 per cent to the
employees and the rest to the stock
holders.
II the excess given to sharehold-
ers exceeds 10 per cent, all over this
limit is put into a special "compen-
sation fund" to cover deficits in the
operations of other airlines. II any
of them has a deficit for two con-
fsecutive years, the government may
] intervene to correct any operational
mistakes.
When this compensation fund
amounts to more than 10 per cent
of the capital invested, the govern
ment Is authorized to order it used
to extend service or to lower rates
Rates also may be ordered lowered
when the profits of the company are
more than per cent for two sue
ceSsive years.
The companies to be formed un-
der the new law must register their
planes as Argentine, buy Argentine
products for preference, and deliver
to the government half of any equip
ment more than Ave years old. This
will be used ito form the aerial re-
serve of the state" The state also
requires the new companies to es-
tablish apprentice-training systems
and prohibits the employment OF
undesirable persons"