LAN suspends flights in Argentina over conflict

BUENOS AIRES, Argentina (AP) — LAN Airlines S.A. is temporarily suspending all domestic and international flights in Argentina.

The local branch of LATAM Airlines Group said Friday that flights were suspended over a dispute with Intercargo, a state-owned company that is the country's sole handler of passenger luggage.

LAN Argentina says flights are grounded at least until Saturday due "to the unilateral decision by the state company Intercargo to suspend the service it provides."

LAN says Intercargo is breaching a contract and is demanding a payment of $6.6 million. Intercargo says LAN pays 40 percent less than other carriers for the service they provide and is demanding more after a recent order by the civil aviation authority.

LATAM was created when Chile's LAN took over Brazil's TAM last year.

©2014 by The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.