Answering ACES320´s reply number 15:
To start out, I was one of the few people here at AV
that had a vote of confidence and approval for the creation of "Alianza Summa", since there was a lot of resistance from the employees of all three companies.
I have worked for 25 years now at AV
, in the Flight Engineering Operations department and flying as a captain of the Boeing 757/767.
It is very sad to see a 31 year product that managed to become a house hold word here in Colombia go down the drain and disappear like Aces did. And the worst part to actually manipulate and use public media to convince the Colombian public and employees of a fake image of a reality that was not actually occurring within the company with deceitful misinformation.
If we took the best of the three airlines that made up Alianza Summa; AV
84 years, MM
57 years and VX
31 years. The total amount is 171 years of aeronautical experience under one roof. Aces was number one in passenger service here in Colombia with their slogan "por el respeto", no doubt about that; Avianca had technologically and operationally a more advanced engineering, maintenance, flight training, reservations, world wide office infrastructure and facilities under its roof in place; and Sam even though a subsidiary of AV
had its goodwill and dedicated faithful followers.
It is a shame that what resulted was the proliferation of the worst defects and faults of the three airlines under the Aces management team, out of nine vice presidencies only two; flight and ground operations were left to Avianca making it a minority group when it came to vote on major operational and logistical decisions.
So today Aces is dead and gone, Avianca and Sam are hanging on a thin thread for survival. And the Alianza Summa finally buried after 2 years has left 3800 jobless.
My personal opinion was then; if we could have capitalized all the good operational aspects and benefits of all three airlines experiences with good common sense; the result would have been something to be proud of and ponder about here in Colombia and the Latin American aviation industry.
The original "Alianza Summa" was supposed to be an airline holding company to exploit and administrate under one roof the three different products, the three airlines were to conserve their respective brand names and identities and were to sell to the flying customer a customized product using all three airlines to satisfy all possible options for their traveling needs within a single travel package plan by Summa.
This included a single common reservation system, code sharing within the three airlines and the operational plan for the three was to be the following:
Avianca as the flag carrier of Colombia with the national shuttle flights, the medium to long haul direct flight operations within the Americas and Europe from the main cities of Colombia; and the majority of the international flights.
Aces was the option in the middle keeping its route structure and handling the majority of the short regional to medium haul and direct flights from the secondary cities, with their direct established international flights from these and as a feeder operation within Colombia for AV
SAM was to operate as the low cost carrier option to fill in the gap as a main line feeder for both AV
here in Colombia; to also cover all the charter operations, special low fare vacation plans and the entire special priced all inclusive vacation programs within Colombia and San Andres Island.
But that plan never got of the ground.
That is true that Avianca had economic problems and was not in the best of shape before Alianza Summa started, but it is also common knowledge now that Aces was in real dire straits before the initiation of the Alianza Summa and if it had not joined up to the alliance, it would have defaulted on June of 2002 according to their economic balance sheet of operations that was finally made public after it defaulted last year.
Also to make matters worse during the alliance, between December 2002 and January of 2003 all of Avianca´s main HARD cash (U.S. Dollars) producing routes were transferred to Aces by management to try to get their economic losses under control, CLO-MIA
except for one flight operated by AV
, were all operated by Aces A320´s. This created the cash flow that reduction at Avianca finally taking the company into chapter 11; and the costs of Aces´s operation were absorbed by Avianca until last march 21, 2003 when Avianca Inc. in NY entered Chapter 11 proceedings when the creditors took control and started managing the cash expenditure of expenses. Aces could not get any more ready cash or financial aid from AV
which caused its final blow and caused its default and going out of service on august 20, 2003 after only 15 months of Alianza Summa.
Avianca with its chapter 11 proceedings managed to renegotiate and lower its lease prices to almost a third less than before. Aces after many negotiations with the lessor companies on its part could not resolve a deal and renegotiate and lower their lease prices on the A320´s and ATR´s. Leaving very little space for survival and salvation of the company.
To give a real insight on the truth, reliability of the A320´s and the ATR´s was very good, both are from an operational standpoint, are excellent and well built and designed airplanes, they both served their purpose and were well liked by their passengers and their crews, including me. But the Boeing’s, MD83´s, and Fokker 50´s are much better workhorses and are much better adapted for this type of airline operation here; and since this is a business, and if it is to survive it has to produce good cash revenue.
Customer service and representation by the way is much better for Boeing than Airbus products here in Colombia. The A320´s and the ATR42-300´s had severe limitations with the average passenger baggage loads due to the historically large bulk volume and small capacity of their cargo holds compared with the B757-200´s and the F50´s. Also the operating cost of the leases was extremely high and was non negotiable by Debis and Watermark which were the leasing companies for the airplanes.
With the monthly lease prices of aircraft that Aces had from Debis and Watermark; for the lease price of two A320´s we can lease three B757´s or four MD
-83´s; and for one ATR we can lease three F50´s.
Another major weakness the ATR´s and A320´s had was their performance restrictions and limitations at high altitude and hot temperature airports.
Also in Alianza Summa operation the B757-200´s have a much better payload capacity, and are better revenue producers from high altitude, high temperature airports as BOG
, RNG, and UIO. They allow some cargo to be carried; the A320 only had capacity just for the luggage.
Here is a list of the aircraft types that were flown by the now defunct ACES for your information:
A320´s, B727-100/200´s, ATR42-300/500´s, DH
-114 Heron 2D
-227B´s, F-27J´s and F-27F´s.
If you want the complete historical listing with registrations and serial numbers, let me know and I shall gladly e-mail it to you.
The main creditors group of AV
´s chapter 11 committee is working together, so far with both offering groups for the company which are CO
/CM and Sinergy of Brazil. They are discussing and showing their financial, operating and long term guarantees and restructuring plans for the airline, to see who gets to keep the company after Judge Alan Gropper and the creditors select the best deal for AV
´s future; we hope to see results this upcoming May 30. or otherwise there might be another extension of time to clarify these proceedings.
The joint venture offer of the Brazilian Sinergy Group which has a small operational airline in Brazil; Ocean Air that operate some Fokker 50’s; is that they will have 75%, and the Colombian Coffee Growers Federation 25% of AV
for the next three years. They want to keep the same administration policies for the mean time, and after three years time, they have the option to sell off or continue with their 25% in the alliance. The Santodomingo group wants to sell off all of their assets and participation in AV
In the Continental/Copa deal they want a complete ownership and control of AV
The best offer so far and the possibility of survival for AV
in the long run would be CO
/CM, they have large airline management experience and are knowledgeable of Latin American aviation. From news given by “ACDAC” or the Colombian Airline Pilots Association; their offer and guarantees for the financial negotiations, debt payment plans (including the pilots pensions), and restructuring plans, with a new administration of the company has so far been the better offer.
Logistically speaking, the BOG
and PTY hubs very well situated in the middle of the Americas, they are only one hour flying time from each other, the resulting combination of services possible and the route structure of AV
can be optimized and rationalized so both can be feeders to each other and complement each other to improve and open new gateways and better connecting flights. It also makes it possible to offer a broader choice of destinations, with convenient itineraries and excellent connection times, a reduced total waiting time between connections and better usage of our network for the passengers to get to their destinations quicker, and minimum on-ground delays. The use of shared terminals and services will also guarantee a smooth passenger handling during connecting flights, and routing of baggage through our hubs.
Fleet wise both AV
have commonality and a good working experience, since we all operate Boeing fleets within our route structures. Also in the future the rationalization of our fleets will bring enhanced operational economics for the companies.
In my personal opinion if this company is to survive, it will be mandatory to change the complete administration scheme of the company if we want to see real results from any restructuring project of the airline, the actual Summa administration (ex Aces) of the company right now backed up by the influence of the Colombian Coffee Growers Federation is to me the most determining factor in getting the company Avianca Inc. into chapter 11, and the defaulting of VX
; under Sinergy they want to keep this scheme.
Under chapter 11 proceedings having all costs managed and approved by the creditors committee in NY has made AV
a viable and productive airline during the last year of operations. The operational results on the economic balance sheet of last year, shows and promises great expectations and good economic results for this year also. Taking into account that petroleum prices are rising.
Now for some good and fresh news, last may 20 the shareholders had an emergency meeting and decided it was time to finally bury Alianza Summa for good, they finally changed all of the board of directors for Avianca getting rid of all the participating members of the Colombian Coffee Growers Federation and nominating a whole new board to create a much better work ambience for the negotiation process of the chapter 11 procedures in NY. I hope this means we are actually going to get some major changes in the administration policies of the company and maybe a better hope for a positive negotiation in the near by future, and maybe actually leave chapter 11 to become a sound airline making an operational profit.
This also means that Avianca Colombia, and Sam become once again the original airlines they used to be.
I also think that here in South and Central America right now the three main aviation groups that show a promise and strong survivability, and are making good progress are:
LAN group in South America conformed by LA
, XL and 4M
TACA group in Central America TA
CONTINENTAL/COPA in the middle with AV
can produce a very competitive group.