The Wilmington morning star., 1945-11-10
ARGENTINA SETS
UP AIR MONOPOLY
BY LAURANCE F. STINT,

~ IlNoo AinHo' Nov. so
The Argentine military goys,-
ment has taken virtual con+r.T Sv.T'N'
commercial aviation witbin i, o'
country through a civil ayi,., ne
code hailed as "putting thp n,,LS ,u,.Ua
interest above the stockholderrsS rSo'ls "
The new code. imposed bv !.
cree, is not expected 10 ~. ~
greatly present operations NJ v' ~
eign airlines Pan American.cr..os' .os'
Panair dc Brasil and comn.ni',,
running planes to Asuncion s .s,
Montevideo. These will bayo ',o
stop carrying passengers betr..~u
points within the country or el,.
submit to the new code. 1t is orns
able they will carry only interr. W.
tional passengers.
The plan calls for six ''zona, \.
influence" with one airline dor,i
nant in each zone. The chosen ~. ;,,
line would not have a mononolv +.
its zone, but would be given prs,
ference in granting new routes
The government will supply "a
per cent of the capital of the III, y
lines to be formed under the pl.r
Bonds cannot be issued for tot.,
of more than 20 per cent Of tbs
capital stock without governmem
approval.
Only native-born Argentines "a,
be stockholders and stock canro,
be resold to foreigners. All bond,
holders also must be Argentine,
No stockholder can own simultans,
ously shares in any ship, railroad
or truck line.
Each airline is limited ia :,
board of directors of six member,
including t h e president and vice
president named by the govern.
ment. These nominations must BE-
approved by the senate. The pr.
vate stockholders can elect the
other four directors and the man
ager.
The law gives tn e government
power to suspend the directors
elected by the private stockholders
when their actions are against
the public interest Stock.
holders 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 30 days, the action may still
be carried through.
All previous airline subsidies and
all exemptions from taxation are
cancelled by the new law In re-
turn for a guaranteed 4 per cent
dividend. On the other hand, the
government frees the airlines from
requirements that they carry gov
ernment mail free and give govern
ment passengers a SO per cent re-
bate on ares.
The government will fix AIRLINE
fares, setting them to give re
| turn of between four and 10 pei
cent on the capital invested. Any
profits up to per cent go entirely
| to the shareholders. Profits be-
tween four and 10 per cent aEF
divided: up to five per cent OF tf'
excess as bonuses to the directors
| 20 per cent to the employees and The
rest to the stockholders.
If the excess given to share.
holders exceeds 10 per cent, all
over this limit is put into speclal
compensation fund.- to cover de-
ficits in the operations of other ar
lines. If any of them has della,
for two consecutive years, the gov
ernment may intervene to correc.
anv operational mistakes.
When this compensation flna
| amounts to more than 10 per cen'
of the capital invested, the govern
ment is authorized to order 1t usea
to extend service or to lower ra'eS'
Rates also may be ordered loWeIsa
when the profits of the compan
are more than 4 per cent Tor 'V'
successive years.
The companies to be formed I'LL, m
der the new law must reslS,a
their planes as Argentine buy NJ
gentine products for prefefeh.I,,, =,
and deliver to the government ,@-, ,,,
of any equipment more than Ln. W.
wears old. This will be USED 7"
form the aerial reserve Of Nv w
state". The state also REQUIRES Nv m
new companies to establish aI ~
prentice training systems 'ns n.
"prohibits the employment o. u"
desirable persons.