MADRID, May 22 (Reuters) - The heads of the largest airlines in South America's Mercosur trade bloc will meet in Buenos Aires in early June to discuss a formal alliance to cut costs, the president of Aerolineas Argentinas said on Wednesday. Antonio Mata said the alliance would allow airlines in the region -- which groups Argentina, Brazil, Uruguay and Paraguay -- to reduce expenditure by code sharing and jointly buying fuel, insurance and other goods and services. "I think Aerolineas has the leadership to create a strategic alliance in Mercosur which will be called Alas Andinas and we have invited companies like LanChile (LAN), Varig (VAGV4), Pluna, Aeropostal or TACA," Mata told journalists. "The idea is for this alliance to be exerting pressure on purchases in 60 days time. The first meetings will take place in Buenos Aires in June," he added. Airlines in Mercosur have faced tough times as currency depreciations in Brazil and Argentina have magnified the cost of servicing foreign debt, while a regional economic downturn and the aftermath of the September 11 attacks have hurt passenger numbers. Mata said cross holdings of stocks had also been proposed by some of the companies interested in participating in the proposed alliance, but that Aerolineas did not plan to participate for the time being. He said Aerolineas was also close to securing a deal on code sharing with Continental Airlines (CAL) for traffic in North America. Aerolineas Argentinas is owned by Spanish group Air Comet. ©2002 Reuters Limited.