Flying Blind.

FILE THIS UNDER "WE KILLED THE open skies agreement in order to save it."

Argentina made clear its willingness to go to any lengths to save air carrier Aerolineas when the government put its open skies agreement with the United States on ice.

Argentina has until 2003 to secure and comply with the open skies agreement. But first Aerolineas, with its US$600 million debt, will have to catch the eye of some solid investors. Spanish controlling company Sepi's $70 million infusion in early February, although welcome, represented little more than a token act.

The carrier faces some hard work before it can woo investors. Its workforce needs to hike productivity and talks with unions later this year promise to be tough. At the same time, the carrier will have to find a way to negotiate out of its jet lease agreements so it can streamline the fleet and make it more uniform. The 50-plane inventory is now split between older gas hogs and the pricey, more efficient A330s the airline picked up last year.

"It's not as though there is just one thing to do here," Bob Booth, president of Miami-based Aviation Management Services, says. "Still, this is not a basket-case airline. This is a billion-dollar airline."