Argentina to bail out airline

The Argentine government is poised to inject £16.9m into Aerolineas Argentinas to pay back salaries and help save it from possible bankruptcy.

The cash injection comes after nearly two months of bitter industrial disputes, including a nine-day strike that grounded the carrier's flights.

If the company shuts down, its 7,000 workers will lose their jobs at a time when Argentina is already mired in a three-year-old recession.

The first government cash injection would total about £11.3m - enough to pay the April salaries for the company's workers.

The Labour Ministry said the government could depose the money as early as next week.

The airline's latest woes began with the strike on April 24 by union workers opposed to plans to lay off more than 500 employees.

The Spanish government is the majority shareholder and its holding company SEPI said it must pare down the work force to restore the carrier to financial health.

Aerolineas, which is Argentina largest carrier, lost about £19m during the strike.

That loss, combined with the £635m debt that the airline has accumulated since is was privatised in 1991, forced the company to withhold workers' April salaries.

Even after the strike ended on May 2 with forced arbitration, employees staged protests in Buenos Aires' domestic airport to demand the back pay.