SANTIAGO, May 17 (Reuters) - LATAM Airlines Group SA said its Argentina unit was halting all of its flights in the country until 1330 GMT on Saturday after a state company unilaterally decided to stop providing services to the airline.
Intercargo provides Latin America’s biggest carrier with ramps at Argentine airports, loads suitcases and manages passenger buses to terminals, LATAM said in a statement late on Friday.
In a statement, published by Argentine state news agency Telam, Intercargo said LATAM “doesn’t want to pay more than what was agreed initially” and said it is owed a debt of nearly 40 million Argentine pesos ($7.6 million).
Intercargo says the tariffs in the current contract with LATAM should be raised to comply with new government rules.
A source in Argentina’s airlines industry familiar with the conflict said Intercargo was demanding the equivalent of $18 million a year to resume the provision of services.
But a spokesman for LATAM’s Argentina unit told local media that Intercargo was flouting two separate judicial decisions ordering it to get back to work.
LATAM is doing everything it can to resolve the issue, the Santiago-based company said.