LAN said that an eviction from Buenos Aires airport would mean the loss of 1,500 jobs. Creative Commons

After telling Chilean airline LAN that it had to vacate its hangar in the Jorge Newbery airport in Buenos Aires, Argentina has tried to make amends with its neighbor by assuring that LAN can still fly from Argentina.

LAN protested the decision, based on an executive order by the airport authority requiring that all facilities belonging to the domestic airport are to be used exclusively by state-owned airlines -- which the Chilean company took as a direct attempt to penalize them in favor of government-owned Aerolineas Argentinas.

In a statement released by the Argentinean Port Authority, the government said that the obligation to give back the space does not affect the company’s flights within the country. “LAN will be able to keep its operations from and to the Aeroparque Metropolitano [Jorge Newbery Domestic Airport] in Buenos Aires, without compromising the safety of flights and employment,” read the statement.

The controversy began on Wednesday, when the Argentinean authority told the Chilean airline that it had ten days to vacate the hangar at the domestic airport that it had been using for seven years. LAN, a unit of LATAM Airlines Group SA (NYSE:LFL), Latin America's biggest airline, replied that it would seek a court injunction to stop the eviction, and threatened to pull its flights from Argentina altogether.

Argentina replied that LAN could move its services to the other Buenos Aires international airport, the much more distant Ezeiza, but the airline refused. The quarrel got to the Chilean government, which has been trying to clear the air with its Argentinean counterpart.

Meanwhile, as the two Latin American countries work towards settling their differences, Spanish airline Air Europa is eyeing how to exploit them, by finding a foothold in the rapidly expanding Latin American air transport market, one of the fastest-growing in the world. Chairman Juan José Hidalgo wants Air Europa to be a real alternative to Iberia, Spain’s biggest airline, within the next two years, as reported by Spanish newspaper Expansión. Iberia is a unit of International Consolidated Airlines Group (LON:IAG), which also owns British Airways.

“Our job is to have as many flights to as many destinations as Iberia does in Latin America,” he told Spanish news agency EFE while on a visit to Venezuela. Brazil, in particular, is an attractive market for the company. “We are planning on reaching São Paulo around Christmas, and Rio de Janeiro by March 2014 -- right on time for the World Cup,” said Hidalgo.