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ASU Struggles With High Costs; Wants AA Back  
User currently onlineMAH4546 From Sweden, joined Jan 2001, 32779 posts, RR: 72
Posted (8 years 1 month 3 days 15 hours ago) and read 3568 times:

Asuncion airport officials are working very, very hard to create a lucrative incentive package for American Airlines to return to the airport. Citing the high costs of flying to Asuncion, American Airlines ended service last February, because the costs of flying to the airport made the route unprofitable. Asuncion is the most expensive airport to fly to in Latin America, and has lost three of it's most important carriers - American, LAB, and Varig - in the past few months. Hopes of getting Copa Airlines were dashed earlier this summer, when they flat out told ASU officials they have no interest in flying there anytime within the next five years. The main culprit, in addition to high operating fees at the airport, is a recently initiated 6% travel agent commission that cut into airlines profit's heavily.

None the less, ASU officials are hoping that an incentive package to lure back AA. American Airlines has said they are very open to resuming Asuncion service, but only if the 6% travel agent commission fee is dropped. American Airlines paid fees over approximately $2,000,000USD to operate to the airport annually. They have flown from Asuncion since 1992, originally via Bolivia and until the end via Sao Paulo, daily with a 767-300ER. In 1999, American Airlines announced non-stop Miami-Asuncion service, but it never launched due to the economic crisis of the time. Following the launch of non-stop Miami-Montevideo flights in November 2004, American Airlines was set to announce (but never did) non-stop flights on Miami-Asuncion. Loads were never stellar, but healthy cargo traffic and good yields made the service substainable. If AA does return, it would likely be non-stop with a 757.

Some articles about Asuncion's troubles (Spanish only and require registration, sorry):

Operadores recalcan que los vuelos no llegan por la falta de pasajeros
http://www.abc.com.py/articulos.php?pid=271881


Paraguay busca convencer a aerolíneas para que retornen

http://www.ultimahora.com/NoticiasPa...sp?Noticia=309257&Fecha=12/08/2006

La ida de AA significará para Dinac una pérdida anual de US$ 2.000.000
http://www.abc.com.py/articulos.php?pid=271714


a.
24 replies: All unread, jump to last
 
User currently offlineBigGSFO From United States of America, joined Jun 2005, 2924 posts, RR: 6
Reply 1, posted (8 years 1 month 3 days 15 hours ago) and read 3463 times:

Would daily MIA-ASU require 2 757's or could AA do it with one given they would have a monopoly on the route?

User currently onlineMAH4546 From Sweden, joined Jan 2001, 32779 posts, RR: 72
Reply 2, posted (8 years 1 month 3 days 14 hours ago) and read 3427 times:

Quoting BigGSFO (Reply 1):
Would daily MIA-ASU require 2 757's or could AA do it with one given they would have a monopoly on the route?

It isn't the type of market that would require redyes both ways. Like with Bolivia (until now that they have a 2nd frequency), they could have a redeye down to Asuncion and a daylight back.

MIA-ASU is really stretching the 757s legs, though it is shorter than some CO 752 routes and has the advantage in that it is north/south, so tailwinds aren't a huge issue. If this bites into cargo hauling ability, however, there could be a problem making it viable. MX flew CUN-EZE with a 757 for years with no problems, though, and that is 200+ miles longer.



a.
User currently offlineUalcsr From United States of America, joined May 2006, 485 posts, RR: 1
Reply 3, posted (8 years 1 month 3 days 11 hours ago) and read 3256 times:

MAH4546 - As usual, very interesting and informative post from you. I was actually going to start a Paraguay thread a few days ago; with all due respects to any Paraguayans out there, but the country is kind of obscure, even here in Miami. While I was unaware of the high costs of flying into ASU, I did imagine that it was a tough market to crack. When I worked at UA, we had a sprinkling of pax (usually on missionary work) flying to ASU through GRU on RG; it just didn't seem to be a sustainable market and remember it shaply dropping after US citizens needed visas to enter the country. Although they lack a national/international airline, the actual traffic just doesn't seem to be there. Does LAPA fly domestically or do they even exist anymore?

User currently offlineMD90fan From Bahamas, joined Jul 2005, 2931 posts, RR: 7
Reply 4, posted (8 years 1 month 3 days 10 hours ago) and read 3221 times:

I know they had TAM Mercosur that flew from Paraguay.


http://www.devanwells.blogspot.com/
User currently offlineUalcsr From United States of America, joined May 2006, 485 posts, RR: 1
Reply 5, posted (8 years 1 month 3 days 10 hours ago) and read 3199 times:

Quoting MD90fan (Reply 4):
I know they had TAM Mercosur that flew from Paraguay.

Thanks! Do you know what TAM's ownership interest is in this company? Just went to their website; from ASU, it looks as if they have 2 non-stop flights daily to EZE (or AEP), 1 to GIG, 1 to SRZ, 1 to SCL and 2 to GRU (or CGH). 7 flights for a national capital is very limited.


User currently offlineMD90fan From Bahamas, joined Jul 2005, 2931 posts, RR: 7
Reply 6, posted (8 years 1 month 3 days 10 hours ago) and read 3174 times:

Quoting Ualcsr (Reply 5):
Thanks! Do you know what TAM's ownership interest is in this company? Just went to their website; from ASU, it looks as if they have 2 non-stop flights daily to EZE (or AEP), 1 to GIG, 1 to SRZ, 1 to SCL and 2 to GRU (or CGH). 7 flights for a national capital is very limited.

No problem buddy, it grew out of a fully owned subsidary of TAM called ARPA which flew Cessna Caravans, and ARPA purchased a 80% stake of the national airline at the time. After ARPA brought it, TAM merged ARPA and LAPA under the TAM Mercosur banner and gave the F-100's.

So JJ owns 80% and the Paraguay government owns the rest.  Smile



http://www.devanwells.blogspot.com/
User currently offlineElmoTheHobo From United States of America, joined Aug 2006, 1539 posts, RR: 1
Reply 7, posted (8 years 1 month 3 days 8 hours ago) and read 3108 times:

While Iberia didn't serve Asuncion in its own right, it cancelled its codeshare with TAM to ASU (I forget whether it was from EZE or GRU) right around the same time for (I'd assume) the same reason.

I'd bet that American is waiting to see where country is going politically. If it goes to the left like like Bolivia, American may be a bit more hesitant about launching flights.


User currently onlineMAH4546 From Sweden, joined Jan 2001, 32779 posts, RR: 72
Reply 8, posted (8 years 1 month 3 days 8 hours ago) and read 3107 times:

Quoting ElmoTheHobo (Reply 7):
I'd bet that American is waiting to see where country is going politically. If it goes to the left like like Bolivia, American may be a bit more hesitant about launching flights.

AA isn't going to let politics get in the way of making money. It is actually the more politically opressed countries, like Haiti, Bolivia, and Venezuela, that make AA more money.

AA will obviously consider safety a top priority, and if verging left makes Paraguay unsafe, they won't fly there. Otherwise, they don't care. They are a business, not a government.



a.
User currently offlineElmoTheHobo From United States of America, joined Aug 2006, 1539 posts, RR: 1
Reply 9, posted (8 years 1 month 3 days 7 hours ago) and read 3070 times:

True, but I see Paraguay as being a bit different from those three. Paraguay doesn't have much in terms of terms of natural resources, there aren't significant Paraguayan populations in the US (please correct me if I'm wrong), and trade between the US and Paraguay is a bit lopsided.

Bolivia and Venezuela have oil and natural gas, and Venezuela and Haiti have large (or significant) expatriate and emmigrant populations in the United States.

If Paraguayan industry is nationalised by a leftist government (which wouldn't be until later in the decade), what would make up the traffic between the US and Paraguay (although what traffic would exist would probably carry good yields)?


User currently offlineXkorpyoh From United States of America, joined Oct 2004, 819 posts, RR: 0
Reply 10, posted (8 years 1 month 2 days 23 hours ago) and read 2960 times:

I went to ASU last year and it is ridiculous that they charge US$50 for a visa that you have to get in advance.
If you really want tourist to go and to make it easier for business travelers, get rid of the visa requirement. It is useless anyway.
I flew on TAM Mercosur SCL-ASU and then ASU-IGU-CWB and the flights were packed. The other flights coming from Bolivia and other places, seemed full too as I saw the paxs deplane to connect to the other flights in that mini-hub. So the traffic is there. They just need to entice more visitors and airlines to go back with smarter policies (no travel agent commission, no visa, less taxes, etc).


User currently offlineLipeGIG From Brazil, joined May 2005, 11438 posts, RR: 58
Reply 11, posted (8 years 1 month 2 days 21 hours ago) and read 2866 times:
AIRLINERS.NET CREW
FORUM MODERATOR

Quoting Xkorpyoh (Reply 10):
I flew on TAM Mercosur SCL-ASU and then ASU-IGU-CWB and the flights were packed. The other flights coming from Bolivia and other places, seemed full too as I saw the paxs deplane to connect to the other flights in that mini-hub. So the traffic is there. They just need to entice more visitors and airlines to go back with smarter policies (no travel agent commission, no visa, less taxes, etc).

TAM is very happy with TAM Mercosur and will replace the F100 during the next 4 years with A319's with 144Y and we can even see some with Business Class.

Quoting Ualcsr (Reply 5):
Do you know what TAM's ownership interest is in this company? Just went to their website; from ASU, it looks as if they have 2 non-stop flights daily to EZE (or AEP), 1 to GIG, 1 to SRZ, 1 to SCL and 2 to GRU (or CGH). 7 flights for a national capital is very limited.

A little comment: CGH does not receive any international flight, all Sao Paulo Int'l flights goes to GRU.

Felipe



New York + Rio de Janeiro = One of the best combinations !
User currently offlineAAL0616 From United States of America, joined Jul 2006, 272 posts, RR: 4
Reply 12, posted (8 years 1 month 2 days 21 hours ago) and read 2805 times:

It will be easier to simply resume service with the 767 tag from Sao Paulo.

That said, MAH4546 is completely correct to say that a 757 run from Miami would or could operate to and from Asuncion in the same manner that La Paz and Santa Cruz are served by flight 922, a simple turn around fly pattern, down in the dark and a morning return with a two hour or less ground time.

Once again, I recommend "follow the winglets," as well as a comparison of cargo capacity between aircraft to give us a clue.

The winglets will assist somewhat the return flights to Miami and the operating objective, to justify service, of maintaining realistically suitable belly loads. The belly capacity is one argument for the tag-on 767 resuming. This is countered by whatever demand exists for direct service to the United States.

The calculus for making money will also include the smaller passenger capacity of the 757 (good for Asuncion) versus the decreased cargo capacity, flown to its limit or reduced by operating limitations (bad for Asuncion). It was apparent that the factors of 767 passenger revenue and yield compared with cargo, and costs of maintaining a station, led to AAL's withdrawal in the first place.

My non-scientific observation has been similar to others who have already commented; that is, Paraguay has not historically been the most robust air travel market to and from North America, nor within South America, by virtue of location, population size, industry and natural resources.

Have the fundamental economics changed given the possibility of direct 757 service, and are the local authorities are really sweetening the pot enough to provoke a return by AAL?


User currently offlineNygfan84 From United States of America, joined Jul 2001, 172 posts, RR: 0
Reply 13, posted (8 years 1 month 2 days 21 hours ago) and read 2782 times:

When did Arizona State ever get an airport? lol

User currently offlineAJMIA From United States of America, joined Dec 2005, 733 posts, RR: 15
Reply 14, posted (8 years 1 month 2 days 20 hours ago) and read 2722 times:

Quoting AAL0616 (Reply 12):
It will be easier to simply resume service with the 767 tag from Sao Paulo.

It would be nice to see ASU come back to the system, but I imagine if it comes back it MUST be a 757 nonstop to/from Miami.

With RG basically out of the picture the MIA-GRU flights are filling up just fine. Hopfully the daylight flight will stay daily all year, and we might even add a 4th daily flight.

Crew costs would also be cheaper on the 757 flight as you would not need a crew for an extra day in GRU to fly the GRU-ASU-GRU leg.

AJMIA



Lady it's a jet... not a kite.
User currently offlineAAL0616 From United States of America, joined Jul 2006, 272 posts, RR: 4
Reply 15, posted (8 years 1 month 2 days 20 hours ago) and read 2696 times:

AJMIA, I personally agree with you regarding the direct 757 being the better option, so long as the people economics outweigh the freight economics. Although it would not require a 767 crew from MIA to take a two day flip from GRU, the ASU nonstop will require an overnight crew rest as well (but not the extra day as you mention). Either way it will be handled. The hotel bills do factor into the equation as well as the hassle of the extra night on the road. Also, the extra flying hours are no big deal.

It would be really fun if there were still EZE-SCL tags, with all the great mountain scenery during the morning westbound and afternoon eastbound. GRU-ASU is just up and down.


User currently offlineAJMIA From United States of America, joined Dec 2005, 733 posts, RR: 15
Reply 16, posted (8 years 1 month 2 days 19 hours ago) and read 2651 times:

Quoting AAL0616 (Reply 15):
the ASU nonstop will require an overnight crew rest as well (but not the extra day as you mention)

Gotcha. I work on the ground so I am not familiar with crew schedule and rest but the way I imagine it would work...

via GRU is
day 1 fly MIA-GRU
day 2 arrive GRU and rest
day 3 fly GRU-ASU-GRU
day 4 fly GRU-MIA

nonstop
day 1 fly MIA-ASU
day 2 arrive ASU and rest
day 3 fly ASU-MIA

It seems to me like you would have better use of your crews, and limited MIA-GRU seats by flying MIA-ASU nonstop.

Did AA carry much local traffic on the GRU-ASU flight when we had it?

AJMIA



Lady it's a jet... not a kite.
User currently offlinePZ707 From Paraguay, joined Mar 2005, 70 posts, RR: 0
Reply 17, posted (8 years 1 month 2 days 19 hours ago) and read 2638 times:

Well, i´m from Paraguay and really it is a PZ monopoly right now, we have 3 GRU, 3 EZE, 1 MVD, 1 SCL, 1 VVI/CBB, 1 GIG per day and only one GOL flt. to GRU via CWB. As many of you said it is a small market but even so we are suffering the lack of bellys for cargo. PZ aircraft are F-100 and almost every flight is packed, sometimes they left some passengers luggage behind. Nowadays is not easy to get tickets but frankly speaking and based in my humble opinion i don´t see a return of AA in the near future. Their flight was never profitable (first for BRANIFF, then for EASTERN and lately for AA).

User currently onlineMaverickM11 From United States of America, joined Apr 2000, 17494 posts, RR: 45
Reply 18, posted (8 years 1 month 2 days 19 hours ago) and read 2618 times:

Quoting Xkorpyoh (Reply 10):
If you really want tourist to go and to make it easier for business travelers

That would be too easy and rational. If the world, particularly the third world, got it through their thick $*&%(*@# heads that adding obstacles to enter the country reduces the number of tourists and amount of business, the world would be a much better place.



E pur si muove -Galileo
User currently onlineMAH4546 From Sweden, joined Jan 2001, 32779 posts, RR: 72
Reply 19, posted (8 years 1 month 2 days 18 hours ago) and read 2552 times:

Quoting PZ707 (Reply 17):
i don´t see a return of AA in the near future. Their flight was never profitable (first for BRANIFF, then for EASTERN and lately for AA).

That is incorrect. The flight did not print money like Montevideo does, but it was marginally profitable. It made money until around the last year or two of operations, when high operating costs at the airport and higher fuel costs hurt it.



a.
User currently offline2travel2know From Panama, joined Apr 2005, 3580 posts, RR: 4
Reply 20, posted (8 years 1 month 2 days 17 hours ago) and read 2516 times:

Quoting MAH4546 (Thread starter):
Hopes of getting Copa Airlines were dashed earlier this summer, when they flat out told ASU officials they have no interest in flying there anytime within the next five years. The main culprit, in addition to high operating fees at the airport, is a recently initiated 6% travel agent commission that cut into airlines profit's heavily

When it comes to new destinations announcements, I wouldn't put my money on CM words. This summer CM could have said they've no interest in ASU, I'll take that comment with a grain of salt, because just seeing what's going on with the announced POS flights over the past few months and how MAR "suddendly" apeared on its network, CM says one thing and does another.
If CM has the plane and the conditions are there for at least a thrice weekly profitable PTY-ASU-PTY, ASU could be included in next years new destinations. Sure some people in Ciudad del Este are going to appreciate an ASU-PTY flight.



I don't work for COPA Airlines!
User currently onlineMAH4546 From Sweden, joined Jan 2001, 32779 posts, RR: 72
Reply 21, posted (8 years 1 month 2 days 16 hours ago) and read 2482 times:

Quoting 2travel2know (Reply 20):
When it comes to new destinations announcements, I wouldn't put my money on CM words. This summer CM could have said they've no interest in ASU, I'll take that comment with a grain of salt, because just seeing what's going on with the announced POS flights over the past few months and how MAR "suddendly" apeared on its network, CM says one thing and does another.
If CM has the plane and the conditions are there for at least a thrice weekly profitable PTY-ASU-PTY, ASU could be included in next years new destinations. Sure some people in Ciudad del Este are going to appreciate an ASU-PTY flight.

I would. The market is a difficult one and there are numerous better oppurtunities for Copa. The only reason I give AA a shot is that they might get a good financial deal worked out for them. ASU airport officals approched Copa willing to do a deal. Copa said no thank you, simple as that.



a.
User currently offlineUalcsr From United States of America, joined May 2006, 485 posts, RR: 1
Reply 22, posted (8 years 1 month 2 days 15 hours ago) and read 2430 times:

Quoting LipeGIG (Reply 11):
A little comment: CGH does not receive any international flight, all Sao Paulo Int'l flights goes to GRU.

Thanks, wasn't aware of that.

Quoting Nygfan84 (Reply 13):
When did Arizona State ever get an airport?

LOL!!


User currently offlineHardiwv From Brazil, joined Oct 2004, 8780 posts, RR: 49
Reply 23, posted (8 years 1 month 2 days 6 hours ago) and read 2277 times:

Quoting PZ707 (Reply 17):
and only one GOL flt. to GRU via CWB

GOL announced that it will change its flight GRU-CWB-ASU to the following route:

SSA-BPS-CNF-GRU-CWB-ASU. This will link the city of Belo Horizonte and holiday-resorts in Bahia to Paraguay. The flight will operate 6 x week.

Rgs,


User currently offlineUSADreamliner From , joined Dec 1969, posts, RR:
Reply 24, posted (8 years 1 month 1 day 16 hours ago) and read 2130 times:

So,how many airlines fly to ASU right now? Aerolineas Argentinas and TAM are the major ones?

Quoting Ualcsr (Reply 3):
Does LAPA fly domestically or do they even exist anymore?

LAP or LAPSA. LAPA was an airline from Argentina.

Quoting ElmoTheHobo (Reply 7):
While Iberia didn't serve Asuncion in its own right, it cancelled its codeshare with TAM to ASU (I forget whether it was from EZE or GRU) right around the same time for (I'd assume) the same reason.

Iberia also used to fly in the early 90's from its hub in Buenos Aires the route EZE-ASU with a DC-9-32.

usadreamliner


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