Peru's Aero Continente airline sues Chile government

[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]

 



SANTIAGO, Chile, April 25 (Reuters) - Peru's flagship airline, Aero
Continente, filed a lawsuit against the Chilean government on Thursday for
damages allegedly caused by a court-ordered suspension of its Chilean
operations in July 2001.

A Chilean judge ordered the freeze after the state attorney's office accused
the airline of drug-related money laundering.

The court order was lifted two months later for lack of evidence.

"We have presented the lawsuit because of the injustice suffered by the
company. The damages are incalculable," Lupe Zevallos, chairman of the
airline, told reporters after submitting the lawsuit in Santiago's main
courthouse.

The airline did not specify how much it was sueing for, leaving that up to
the judge. Last year, Zevallos threatened to sue Chile for $1 billion but
her lawyer signaled on Thursday the final amount would be much lower.


"The figure will be determined by the judge, but it will be a significant
amount. Several million dollars, I believe," said the airline's lawyer Julio
Disi.

"The only thing I can say is that for each airplane detained, there was a
loss of $3 million," he added.

Aero Continente was forced to park five airplanes in Chile. The Chilean
court also arrested four top executives of Aero Continente, closed its 15
offices in Chile and froze bank accounts of $37 million.

Although the court suspension lasted only two months, the airline was only
able to partially renew flights in the final quarter of 2001 with a fraction
of its previous staff. Financial troubles led it to dismiss 400 of its 600
employees last year.

The firm's problems were further aggravated when Chilean aviation officials
detected safety problems with some of its aircraft, temporarily grounding
them.

The airline's legal action against the Chilean state comes one month after a
Peruvian court absolved Aero Continente's founder Fernando Zevallos --
sister of Lupe Zevallos -- of similar charges of drug money laundering.

Aero Continente, known for its aggressive pricing strategy for conquering
new markets, is one of Latin America's fastest-growing airlines. It has a 60
percent market share in Peru.

The company has a 4 percent market share in Chile, which is dominated by Lan
Chile (LAN) (LFL).


©2002 Reuters Limited.

[Index of Archives]         [NTSB]     [NASA KSC]     [Yosemite]     [Steve's Art]     [Deep Creek Hot Springs]     [NTSB]     [STB]     [Share Photos]     [Yosemite Campsites]