BUENOS AIRES (Reuters) - LATAM Airlines Group LAN.SN LFL.N, the biggest carrier in Latin America, is stirring popular sentiment against Argentina, the country's airport regulator said on Thursday, in a standoff threatening operations at a key Buenos Aires airport.
The seizure of a hangar at the Aeroparque Jorge Newbery from local unit LAN Argentina is part of a campaign to damage the airline in the country, LATAM Vice President Enrique Cueto said late on Wednesday.
Argentine regulators have given LAN until the end of the month to vacate the Aeroparque hangar where it maintains a dozen Airbus A320s which fly on 14 domestic routes in the country. The airline has said the demand threatens its operations in Argentina, sparking warnings from an airport workers' union that the regulators were endangering jobs.
"We asked for the hangar, but we never said they had to stop flying. LAN said that to generate alarm among passengers, unions and the rest of society," Gustavo Lipovich, the head of airport regulator ORSNA, told a state news agency on Thursday.
The dispute has triggered a flurry of diplomatic activity between Argentina and neighboring Chile, home of the airline's major shareholders, which once included Chilean President Sebastian Pinera.
LAN Argentina is the chief domestic competitor for state carrier Aerolineas Argentinas, which was nationalized in 2008.
The regulatory tangle in Argentina is seen as another headwind for LATAM, as a stronger dollar and weaker air traffic in Brazil have battered the profitability of its operations.
Reporting by Alejandro Lifschitz, writing by Brad Haynes, editing by G Crosse