Gonzalo
Topic Author
Posts: 1527
Joined: Tue Aug 23, 2005 2:43 am

AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 2:25 am

Since the Argentinian government took ( again ) control of the airline from the Spanish Marsans Group, in 2008, the tax payers give to the airline 2,44 Billion dollars. With this money they could buy 44 brand new 737 NG, but they only have 2 new 737-700 in the fleet. The big majority of the money, around 2,2 Billion dollars, goes to keep the airline "operational", and only 240 million dollars was compromised in the purchase of new metal for the fleet.

For how long this situation will be tolerated by the tax payers in a country with much more important troubles to attend is a mystery, but the bottom line is, AR needs a radical change in the way they are doing business, or the outcome will be disastrous for the airline and for the Argentinian people.

Thoughts ?

G.
Gear Up!!: DC-3 / EMB-110 / Fairchild-227 / Ab318-19-20-21 / B732 / B763 / B789
 
AR385
Posts: 6742
Joined: Fri Nov 07, 2003 8:25 am

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 4:02 am

If you are saying they have only gotten two "new" 737-700s as in "factory new", probably. Fact is though, they have incorporated over 15, if not more.

Austral has also gotten over 20 ERJs and AR and Austral are essentially the same.

Having said that, AR is a pretty crappy airline, going nowhere since a long time ago.

But it is a bastion of Cristina´s son, and represents the "good" years of the K´s policy of getting Argentina back on its track.

You can see how they are doing exactly the same these days with Repsol-YPF. Although the way Marsans was managing the airline was just as crappy as AR is being managed today. So I don´t think there is any difference. At least in the State´s hands the airline is not being plundered as it was with IB and Marsans.
 
LipeGIG
Posts: 5050
Joined: Tue May 03, 2005 7:33 am

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 4:19 am

It seems also their plans to build an amazing network in Brazil is not doing that well. They said would run BUE-GRU 9x daily and BUE-GIG 6x daily... now reduced to 4x/5x daily to GRU and 3x daily to GIG, some of them with E-Jets.
New York + Rio de Janeiro = One of the best combinations !
 
ghost77
Posts: 4461
Joined: Wed Mar 01, 2000 2:07 pm

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 4:28 am

Sadly, as even in some cases my country is too, Argentina is a joke.

g77
Ricardo Morales - flyAPM - ¡No es que maneje rapido, solo estoy volando lento!
 
User avatar
aerorobnz
Posts: 7488
Joined: Sat Feb 10, 2001 3:43 pm

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 6:17 am

Just some of the reasons I can think of
- Woefully dated inflight product. Hard to get decent yields with the worst product on any of the longhaul routes they fly
- A dreadful on time performance, customer service record. Again hard to get people to fly them when just about everyone else competing against AR does a better job
-The staff have powerful unions which are good for the employees individually, but inhibit the company, it also appears to be a mature work force, which of course costs far more and is far more difficult to move on.
Flown to 120 Airports in 44 Countries on 73 Operators. Visited 55 Countries and counting. Wanderlust is like Syphilis, once you have the itch it's too late for treatment.
 
G500
Posts: 1265
Joined: Tue Oct 18, 2011 11:45 pm

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 7:25 am

here we go again with Argentinia... just read about how the government is mishandling the economy again, and Mrs. Fernandez is forcing agencies report lower than actual inflation rates.

Read on a magazine they're traying to gain acccess to fly to the Falkland Islands.. I wonder if they're going to make money there
 
scouseflyer
Posts: 2165
Joined: Wed Apr 26, 2006 7:02 pm

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 8:55 am

Quoting g500 (Reply 5):
here we go again with Argentinia... just read about how the government is mishandling the economy again, and Mrs. Fernandez is forcing agencies report lower than actual inflation rates.

Read on a magazine they're traying to gain acccess to fly to the Falkland Islands.. I wonder if they're going to make money there

I don't think that the posturing over the Falklands is much to do with money (there's some oil but noone really knows how much and it's very difficult to extract), it's about providing a diversion from the domestic financial issues that they're expericing - AR being one of them.
 
jfk777
Posts: 5868
Joined: Tue Aug 22, 2006 7:23 am

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 10:36 am

Swallow some Argentine pride and sell the airline to LAN. AR is too far gone to save itself.
 
bjorn14
Posts: 3552
Joined: Sat Feb 27, 2010 2:11 pm

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 10:40 am

Quoting scouseflyer (Reply 6):
(there's some oil but noone really knows how much and it's very difficult to extract),

They've found 3 fields with an estimated 8.3B BBL in them which is triple the size of all the UK North Sea fields.
"I want to know the voice of God the rest is just details" --A. Einstein
 
aloges
Posts: 14842
Joined: Tue Jan 17, 2006 3:38 am

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 10:45 am

Quoting jfk777 (Reply 7):
Swallow some Argentine pride

Umm... as the people on the Falkland Islands might say: not bloody likely.  
Don't cry because it's over, smile because it happened.
 
andrefranca
Posts: 750
Joined: Wed Jun 01, 2011 4:10 am

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 11:32 am

Quoting scouseflyer (Reply 6):

It's all about PROUD, the argentines are extremely proud, they're known in south american for that, they don't even say they're latinos, "they're europe in south america" hahaha what a joke, AR service is gargantuan, never been so mistreated in my entire life before, and I survived a 12 hours delay and my friend asked the FA water and she told him "If you have arms and can hold one, go back in the galley and pick it youself!" can you imagine?
 
Gonzalo
Topic Author
Posts: 1527
Joined: Tue Aug 23, 2005 2:43 am

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 11:40 am

Quoting AR385 (Reply 1):
Fact is though, they have incorporated over 15, if not more.

Austral has also gotten over 20 ERJs and AR and Austral are essentially the same.

Do you know how many of the 15 737NG you mention as "incorporated" are leased ?
And the E Jets for Austral are part of the 240 million dollars I mentioned before, because those planes were financed with a payment of 15 % from AR and the other 85 % was credit from a Brazilian Bank, so they will be paying those planes monthly with a "good" interest rate and probably making the business not the best move anyway.

Quoting scouseflyer (Reply 6):
I don't think that the posturing over the Falklands is much to do with money (there's some oil but no one really knows how much and it's very difficult to extract), it's about providing a diversion from the domestic financial issues that they're experiencing - AR being one of them.

AND, I will not be very surprised if they use the "new AR flight to the Falklands" as an excuse to finally forbid or eliminate the flight of LAN ( from Punta Arenas, actually this flight is THE connection the islanders have with the continent ). Once LAN is out of the equation, wait a few weeks and cancel the AR flight too with any excuse ( and then the real goal, isolate even more the Falkland's people, can be finally achieved ). This kind of shameless strategies to achieve her personal desires is almost a personal seal of Queen CFK, and like I said, I will not be surprised at all.


G.
Gear Up!!: DC-3 / EMB-110 / Fairchild-227 / Ab318-19-20-21 / B732 / B763 / B789
 
na
Posts: 9173
Joined: Sun Dec 12, 1999 3:52 am

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 11:42 am

The "new" A343s should save some money, and the three 744s have been placed elsewhere, two going to a new Spanish start-up, the third to Aerosur (to replace the leased Virgin 744?).
 
TYCOON
Posts: 436
Joined: Sun Feb 18, 2007 8:20 pm

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 11:51 am

Gonzalo, although I am no big fan of AR following an over 12-hour delay on a Florianopolis-EZE flight, I just need to point out that there is nothing unusual with financing their aircraft (in this case the Embraers) via an 85% loan provided by BNDES. Most airlines do it that way. LAN has done the same for most of its A340s and A320s via an 85% loan provided by banks guaranteed by the European credit agencies (ECAs) as the B767-300s were equally financed via loans of 85% guaranteed by the U.S. Eximbank.
I should know... I worked on putting the financing package together for LAN.
 
r2rho
Posts: 2442
Joined: Tue Feb 27, 2007 10:13 pm

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 12:17 pm

Wait a minute, I thought AR 's problems were due to them being owned in the past by the evil Spanish Marsans Group, and that they would all be solved after re-nationalization. Are you now telling me that AR's problems are internal and have to do with the how company itself functions?   
 
757gb
Posts: 374
Joined: Wed Feb 04, 2009 4:11 pm

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 1:20 pm

About the only good thing about AR right now is their new paint scheme unfortunately. I haven't flown with them in a long time because I've avoided them. You simply can't rely on them from all the stories that are heard just about every week.
God is The Alpha and The Omega. We come from God. We go towards God. What an Amazing Journey...
 
Gonzalo
Topic Author
Posts: 1527
Joined: Tue Aug 23, 2005 2:43 am

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 1:53 pm

Quoting TYCOON (Reply 13):
Gonzalo, although I am no big fan of AR following an over 12-hour delay on a Florianopolis-EZE flight, I just need to point out that there is nothing unusual with financing their aircraft (in this case the Embraers) via an 85% loan provided by BNDES. Most airlines do it that way. LAN has done the same for most of its A340s and A320s via an 85% loan provided by banks guaranteed by the European credit agencies (ECAs) as the B767-300s were equally financed via loans of 85% guaranteed by the U.S. Eximbank.

Oh yes, I know, and I totally agree with that way of doing business, totally acceptable... But there is a "small" difference : LAN, doesn't take a single dollar from the tax payers in Chile since privatization many many years ago, and although is not the best airline in the world, I think we can say, in general terms, is a fine working airline.
AR instead, burn 2,2 million dollars taken from the Argentinian people every day, and not for fleet renewal ( like I said, the amount of money they received in the last years will be enough to have more than 40 737NG, totally paid, rendering any loan from any bank unnecessary ).
And the worst part is, even when 90 % of all the money they receive goes just to run the airline, they are still unable to offer a decent product according to the big majority of the public inside and outside Argentina.

Is that acceptable ??

G.
Gear Up!!: DC-3 / EMB-110 / Fairchild-227 / Ab318-19-20-21 / B732 / B763 / B789
 
2travel2know2
Posts: 2317
Joined: Mon Apr 26, 2010 3:01 pm

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 1:59 pm

Don't want to turn this thread political, but not only AR wastes Argentina USD2,2millions per day but also forces Argentinian Aviation Authorities to keep international airlines from even negotiating frequencies to airports far from EZE.
No matter how local governments try to get international service, they're more than often blocked by the AR Porteño pro all-thru EZE establishment lobbists.
Lets face it, AR won't fly its own metal from ROS, COR, MDZ, TUC, SLA.... to MIA, to SAO, to important hubs or (scheduled) to major leisure destinations for Argentinians.
I'm not on CM's payroll.
 
TYCOON
Posts: 436
Joined: Sun Feb 18, 2007 8:20 pm

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 2:12 pm

Gonzalo, I agree with you on the AR point... and in fact whereas as already stated I am not a fan of AR (far from it) I am a huge fan of Buenos Aires and a fan of LAN as well!! I think LAN is probably the best airline in the Western hemisphere I have ever flown (Aeromexico would be at the same level, maybe just a bit behind). I miss being able to fly their A340s between Paris and Madrid in business class - flat beds for a two hour flight!!

But back to AR and Argentina, a truly sad and very frustrating situation.... And as I say to my Argentinian friends who claim to be Europeans and not Latin Americans, they are neither because other Europeans and other Latin Americans seem to get their act together...
 
AR385
Posts: 6742
Joined: Fri Nov 07, 2003 8:25 am

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 2:23 pm

Quoting Gonzalo (Reply 11):
Do you know how many of the 15 737NG you mention as "incorporated" are leased ?
And the E Jets for Austral are part of the 240 million dollars I mentioned before, because those planes were financed with a payment of 15 % from AR and the other 85 % was credit from a Brazilian Bank, so they will be paying those planes monthly with a "good" interest rate and probably making the business not the best move anyway.

So what? Are you saying every airline in the world should own their fleet 100%? Your OT was filled with half truths, but I let it go. Now, what you are saying above goes beyond that and makes no sense, unless you have no idea about asset management in ailines.

Quoting Gonzalo (Reply 11):
AND, I will not be very surprised if they use the "new AR flight to the Falklands" as an excuse to finally forbid or eliminate the flight of LAN ( from Punta Arenas, actually this flight is THE connection the islanders have with the continent ). Once LAN is out of the equation, wait a few weeks and cancel the AR flight too with any excuse ( and then the real goal, isolate even more the Falkland's people, can be finally achieved ).

They do not want to isolate the Malvinas islands. They want AR to fly there from EZE or AEP. Perfectly understandable and fits right with the accords signed in 1998 or 1999, I´m not sure of the date. If the LAN flight is discontinued unilaterally LAN can still fly there, altough avoiding Argentine soil. Maybe they´ll need a 767 for that.

Do you have any proof? a document where they Argentine government wants to isolate the Malvinas? Cristina did an about face with this policy a few weeks ago. Now if the malvinenses wish to fly another carrier than AR (assuming the LAN flight is cancelled) they are free to fly to the UK on the twice weekly RAF flight.

Quoting TYCOON (Reply 13):
Gonzalo, although I am no big fan of AR following an over 12-hour delay on a Florianopolis-EZE flight, I just need to point out that there is nothing unusual with financing their aircraft (in this case the Embraers) via an 85% loan provided by BNDES. Most airlines do it that way. LAN has done the same for most of its A340s and A320s via an 85% loan provided by banks guaranteed by the European credit agencies (ECAs) as the B767-300s were equally financed via loans of 85% guaranteed by the U.S. Eximbank.
I should know... I worked on putting the financing package together for LAN.

Exaclty. I´m no fan of AR, but what the OP is saying makes no sense.

[Edited 2012-03-13 07:36:39]
 
doug_or
Posts: 3127
Joined: Sat Mar 18, 2000 9:55 am

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 2:54 pm

Quoting andrefranca (Reply 10):
"they're europe in south america" hahaha what a joke

Well from the airline prospective, perhaps they truly are the Italy of South America.  
When in doubt, one B pump off
 
TYCOON
Posts: 436
Joined: Sun Feb 18, 2007 8:20 pm

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 3:04 pm

doug_Or, when was the last time you flew Alitalia?
I just flew them yesterday round-trip Paris Orly to Milan Linate in business class. Excellent service, friendly FAs and the morning flight out left right on time and the return flight last night arrived back in Orly 20 minutes early!!!
I also recently flew AZ business class from Rio de Janeiro to CDG via FCO. The GIG-FCO flight was on an A330 with the new business class. The FAs weren't the greatest, but full flat bed seats more comfortable than BA and the flight was on time as was the flight CDG-FCO (and the FA was great and very pleasant).
So, to all my fellow A.netters, I would suggest you give AZ a try.
But back to AR... I can only hope things improve, but I have been hoping for the last 10 years!! I am booked to fly them from AEP - PDP in December. I'm already stressed that it may not work out as smoothly as I would like... Fingers crossed!
 
MaverickM11
Posts: 15326
Joined: Thu Apr 06, 2000 1:59 pm

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 3:20 pm

Not surprising. Of course they could open up their market to competition and have a flourishing market like Peru, Colombia, Brazil, Chile, even Ecuador, but they insist on maintaining the equivalent of Aeroperu, VASP, or Ecuatoriana. Sad, but that's what you get.
E pur si muove -Galileo
 
2travel2know2
Posts: 2317
Joined: Mon Apr 26, 2010 3:01 pm

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 3:22 pm

This shouldn't be a thread taken by politics but can't stop smiling at this:

Quoting doug_Or (Reply 20):
Well from the airline prospective, perhaps they truly are the Italy of South America.

I've to say rather more likely the Greece of South America; airline-wise and country financial-wise. But Argentina hasn't an E.U. to back rescue it

Back to AR, If there's a will to keep it operating, then How to make it a reliable and not-money losing airline??.
I'm not on CM's payroll.
 
jfk777
Posts: 5868
Joined: Tue Aug 22, 2006 7:23 am

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 4:38 pm

Quoting aerorobnz (Reply 4):
-The staff have powerful unions which are good for the employees individually, but inhibit the company, it also appears to be a mature work force, which of course costs far more and is far more difficult to move on

The over 55 staff should be "incentivized" to retire. DO buy outs and offer extra years credit on the pensions.

Quoting aloges (Reply 9):
Quoting jfk777 (Reply 7):Swallow some Argentine pride
Umm... as the people on the Falkland Islands might say: not bloody likely

The whole of Argentina is subsidizing a "looser" airline with old planes and scheules to all kinds of far away destinations. Does AR really need to fly to Australia ? NO it does NOT. Let LAN handle it.

Quoting 2travel2know2 (Reply 23):
Well from the airline prospective, perhaps they truly are the Italy of South America.
I've to say rather more likely the Greece of South America; airline-wise and country financial-wise. But Argentina hasn't an E.U. to back rescue it

Well said !!!
 
avion660
Posts: 126
Joined: Fri Jan 19, 2007 10:52 pm

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 5:02 pm

Quoting AR385 (Reply 19):
If the LAN flight is discontinued unilaterally LAN can still fly there, altough avoiding Argentine soil. Maybe they´ll need a 767 for that.

I'd love to see a detailed definitive map of Argentine airspace. From this Google map you would think that Chile had access to the Atlantic without flying over any Argentinian land or sea.

 
User avatar
OA260
Posts: 21147
Joined: Thu Nov 30, 2006 8:50 pm

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 6:26 pm

Quoting aloges (Reply 9):

Lol... Maybe a new route for them to make some money BUE-PSY-LHR  
 
SKY1
Posts: 611
Joined: Sun Apr 09, 2006 11:03 am

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 6:32 pm

Quoting AR385 (Reply 1):
Although the way Marsans was managing the airline was just as crappy as AR is being managed today. So I don´t think there is any difference. At least in the State´s hands the airline is not being plundered as it was with IB and Marsans.

Exactly! Now the airline is being plundered for the argentinian themselves, that's the difference.

I wonder how the AR future is going to be now there are not Spaniards to blame.
Time flies! Enjoy life!
 
jetsetter629
Posts: 393
Joined: Thu Nov 01, 2007 6:07 pm

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 6:36 pm

Is Austral any better on internal routes in Argentina for reliability? I know they are the "same" airline that rolls up to the same management group, but with a fleet of E190s, I would hope their delays are minimized. I'm looking to book a flight MDZ-BRC in November and Austral is the only choice
 
Fyano773
Posts: 536
Joined: Fri Mar 12, 2004 11:03 am

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 9:00 pm

Quoting 2travel2know2 (Reply 17):
Don't want to turn this thread political, but not only AR wastes Argentina USD2,2millions per day but also forces Argentinian Aviation Authorities to keep international airlines from even negotiating frequencies to airports far from EZE.

Despite Skyteam AR was lured to join them, apparently AR has prevented from signing interline agreements with AM. Of the five SkyTeam carriers that currently serve Argentina, AR currently only lacks a codeshare agreement with AM.

It's been rumoured that AR will stop servicing MEX by mid Apr, thus things are worsening for them, at least in Mexico.

As long as AR continues with heavy government protection, profitability would be difficult to achieve.
 
LatinPlane
Posts: 2474
Joined: Mon Dec 27, 1999 11:05 am

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 10:13 pm

Pan Am - The World's Most Experienced Airline.
 
doug_or
Posts: 3127
Joined: Sat Mar 18, 2000 9:55 am

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 10:43 pm

Quoting TYCOON (Reply 21):

I was mostly referring to AZ's financial woes over the last 5 or so years rather than their service levels. I look forward to someday having the opportunity to travel with AZ

Quoting 2travel2know2 (Reply 23):
I've to say rather more likely the Greece of South America; airline-wise and country financial-wise. But Argentina hasn't an E.U. to back rescue it

My initial impulse was to reference Greece or Hungry, but I thought those might be a bit close to the bone.
When in doubt, one B pump off
 
Bobloblaw
Posts: 1680
Joined: Fri Jan 13, 2012 1:15 pm

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 10:49 pm

You think in Peron's Argentina losing $2.2m per day is a big deal....pfffft
 
MD11junkie
Posts: 2499
Joined: Tue May 10, 2005 4:59 am

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Tue Mar 13, 2012 11:57 pm

Nothing against you, AR385 - just using this line of your post to state what's actually been done and not creative accountancy done by some mediocre newspaper:

Quoting AR385 (Reply 1):
If you are saying they have only gotten two "new" 737-700s as in "factory new", probably.

You are right, it's fact. 2 737-700 factory new, order by FL then cancelled. Boeing, placed them.

Fact is, yes, 14 737-700 have been incorporated. 2 737-800, with 5 more 737-700 on their way and 3 more 737-800.
Fact is, 4 A340-300X. 3 ex-CX, 1 ex-AF.
Fact is, 20 brand new Embraer E190AR (worth around 800 million dollars)
Fact is, bye bye 3x 747-400 at around u$s 700,000/month each.
Fact is, new simulators installed for the 737NG fleet, A340 and E190.

Quoting AR385 (Reply 1):
Having said that, AR is a pretty crappy airline, going nowhere since a long time ago.

Having said that, managed 99% of flight reliability and 82% OTP domestic (better than competitors) and 70% OTP far better than the achieved 23% with Marsans.


Quoting Gonzalo (Reply 11):
Do you know how many of the 15 737NG you mention as "incorporated" are leased ?

That is all but 22. 2 737-700, 20 E190AR. Let's add also, 2 MD88s from AV - that were bought.

Quoting andrefranca (Reply 10):
It's all about PROUD, the argentines are extremely proud, they're known in south american for that, they don't even say they're latinos, "they're europe in south america"

That's probably the people you hang around with. Or the two people you must've spoken to.

For all of those that keep "blabbing" about the 2.2 Billion dollars "spent" by the government in 4 years, let me remind you that this is the result of 20 years of underinvestment and a company is not turned around in one day, 2 days. It took Efromovich 3 years (IIRC) to turn AV around, a much less devastated airline. It's surprising that the numbers are usually the same in all these "articles". I'm sorry, I don't buy them. I do not buy anyone's side. All I can say is, the airline has improved a LOT since 2008, it's gone from losing 1.25 billion dollars (insider figures) in 2007 to start a climb back.

I'm not going into the political side of things, I'm stating facts. Many armchair CEOs around here speak because they think they know, and understand.

Let me quote Robert Crandall:
The airline business is like Church. Many attend, few understand.

Saludos,
There is no such thing as Boeing vs Airbus as the queen of the skies has three engines, winglets and the sweetest nose!
 
Gonzalo
Topic Author
Posts: 1527
Joined: Tue Aug 23, 2005 2:43 am

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Wed Mar 14, 2012 12:29 am

Quoting MD11junkie (Reply 33):
Many armchair CEOs around here speak because they think they know, and understand.

I only have some questions, I honestly don't know the answers, and maybe you can clarify this for me Gastón.
Can you tell me what academic degrees have the young people of La Cámpora who are running the airline nowadays ?
What is the profession of Mariano Recalde and the other managers in charge ? Were they trained or familiarized with the aviation/airlines business ?
Thanks in advance for the info you can provide us...

G.
Gear Up!!: DC-3 / EMB-110 / Fairchild-227 / Ab318-19-20-21 / B732 / B763 / B789
 
SJOtoLIR
Posts: 2426
Joined: Thu Jul 19, 2007 12:41 pm

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Wed Mar 14, 2012 5:31 am

Based on everything written above, I cannot believe that AR is close to SkyTeam grouping as commented in older threads.
Related press release in Spanish language:


http://www.aerolineas.com.ar/arg/mai...&idIdioma=es&cmbPrensa=791


Regards.
"Goin' up to the spirit in the sky"
 
2travel2know2
Posts: 2317
Joined: Mon Apr 26, 2010 3:01 pm

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Wed Mar 14, 2012 4:05 pm

Quoting doug_Or (Reply 31):
My initial impulse was to reference Greece or Hungry, but I thought those might be a bit close to the bone.

i was given the Argentinean government the benefit of the doubt, I could have compare it to Zimbabwe's airline and finances.

Airlines should be seen as reliable companies made to transport people by air with the safest equipment and procedures without being money-losing ventures... When the national ego comes into airline management, be AR or former Air Jamaica, BWIA, AeroPerú, Ecuatoriana, VASP financial disasters are about to happen.
There'll come the point when Argentina - no matter how popular-driven Mrs Fèrnandez Kishner policies are - won't be able to keep AR flying and the outcome may be nasty.
I'm not on CM's payroll.
 
jfk777
Posts: 5868
Joined: Tue Aug 22, 2006 7:23 am

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Wed Mar 14, 2012 4:55 pm

AR should be put out of its misery and sold to a bigger entity be it LAN or AV/Taca or Copa. Argentina needs to stop feeling "bad" about itself and the need to be "saved". Argentina is a country of educated capable people with good taste and decent natural resources. Stop worrying about the "malvinas Islands", going to war over them 29 years ago got you what ? Nada.

IF LAN becomes the defacto national airline there is nothing to be emabrrased about, it happened in Peru and Brazil.
 
Fyano773
Posts: 536
Joined: Fri Mar 12, 2004 11:03 am

RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

Wed Mar 14, 2012 5:59 pm

In this January article from CAPA we can see a broader view:

Quote:

Aerolineas Argentinas continues to struggle as government protection from competition increases

Argentina’s aviation market has taken another step backwards as the country’s Government continues to come up with new measures aimed at protecting struggling flag carrier Aerolineas Argentinas. Aerolineas, which has not yet completed the restructuring it started three years ago after the carrier was renationalised, faces another challenging year while Latin America’s other leading carriers prosper without any government subsidies or protection.

Full article: http://www.centreforaviation.com/ana...ion-increases-65483



Some points within the article reflect a dire situation:

  • Aerolineas' long-haul operation continues to flounder
  • Aerolineas fails again to secure leases on A330s
  • Implementation of Aerolineas-Delta codeshare faces delays
  • Aerolineas remains Latin America's weakest major airline group
  • Aerolineas' struggles come despite lack of LCC competition
  • Aerolineas continues to bleed cash
  • Santiago to deliver Qantas opportunities Buenos Aires failed to

    Clearly these topics come in line with the subject the OP posed and the airline is not self reliant without government protection. BTW, certainly CAPA is not Clarín...
  •  
    something
    Posts: 1239
    Joined: Fri May 13, 2011 5:29 pm

    RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

    Wed Mar 14, 2012 6:44 pm

    Quoting MD11junkie (Reply 33):
    For all of those that keep "blabbing" about the 2.2 Billion dollars "spent" by the government in 4 years, let me remind you that this is the result of 20 years of underinvestment and a company is not turned around in one day, 2 days. It took Efromovich 3 years (IIRC) to turn AV around, a much less devastated airline. It's surprising that the numbers are usually the same in all these "articles". I'm sorry, I don't buy them. I do not buy anyone's side. All I can say is, the airline has improved a LOT since 2008, it's gone from losing 1.25 billion dollars (insider figures) in 2007 to start a climb back.

    I'm not going into the political side of things, I'm stating facts. Many armchair CEOs around here speak because they think they know, and understand.

    I too am surprised about the high number of experts on the issue we have here on airliners.net.

    But all they have been saying so far is ''how terrible, dirty, bad, unreliable and old..'' of an airline AR is. While some of that might have some truth to it, the real situation however is far more complex. We know nothing about AR's finances. Where do they lose most of their money (long haul, short haul, domestic), are they burdened with financial strains the competition isn't (strong unions, high cost of labor, taxes), how do they finance their investments into the company (from profits, credits, gov't subsidies, selling stocks - at what rates are they procuring capital?).

    In a second thought, it'd be interesting to identify AR's strategic strengths and weaknesses. What routes should they focus on, which ones should be dropped. Should they align with another alliance (they have virtually zero connectivity within Europe).

    Thirdly, how could they make themselves more appealing to customers (soft- and hard product; services; marketing; advertisements; frequent flier programs; codeshare/alliances; performance enhancement etc.).

    All I know about AR is fairly anecdotal. Domestic and other short haul flights in South America are very expensive. Maybe they could lower the prices and achieve higher load factors and earn a higher profit. Their long haul product has virtually no connections ex MAD, BCN and FCO and their cabins look generations behind the offerings of LH, BA and AZ. They do beat the AF/KL 10-abreast 777s in Y, but are usually more expensive in Y, than AF is in Y+. The company also seems a bit unimaginative. Maybe they could join Star Alliance and start flights into MUC. Or maybe they could find their niche in the low-yielding VFR/tourism market and fly COR-EZE-LPA-FRA on a high density 744 but with a great onboard product. I talked to a QF 744 pilot some time ago and he told me flying SYD-PER-JNB was cheaper, than SYD-JNB non-stop because you have to carry less fuel with you. I know a lot of Argentinians who fly to Europe via DFW or YYZ when the price is right; surely if EZE-LPA-FRA undercut the usual suspects by 200 Euro on the round trip, they could fill such a 744 on a 4-5 weekly basis?

    In any case. I'd love to see AR succeed. I'm sure their problems are very convulted in their nature but with the right ambition and the gov't behind them, very solvable. It's just up to them to actually do it.

    Quoting Gonzalo (Reply 34):
    Can you tell me what academic degrees have the young people of La Cámpora who are running the airline nowadays ?
    What is the profession of Mariano Recalde and the other managers in charge ? Were they trained or familiarized with the aviation/airlines business ?


    Maybe Etihad can buy a majority stake in them and bring some expertise to Buenos Aires. I would have never expected the changes they are bringing to Air Berlin to be that drastic, and quickly but I couldn't be any happier. The days of the ''will do..'' mentality seem to finally be over, and a fresh breeze of ''if you build it, they will come'' appears to have arrived. Aerolinas could use some of that spirit. And money..

    Quoting MD11junkie (Reply 33):
    Let me quote Robert Crandall:
    The airline business is like Church. Many attend, few understand.

    I thought those who understood stopped attending.
    ..sick of it. -K. Pilkington.
     
    Gonzalo
    Topic Author
    Posts: 1527
    Joined: Tue Aug 23, 2005 2:43 am

    RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

    Wed Mar 14, 2012 7:46 pm

    Quoting something (Reply 39):
    We know nothing about AR's finances. Where do they lose most of their money

    That is just another BAD SIGN. It is a RED FLAG for the honest people in Argentina and everywhere. I don't want to make this thread a political one, but as you must know, any serious company in the world publishes its Financial Balance annually, even the bad years when they loose tones of money, because in the world of the serious economy, TRANSPARENCY has a higher value than the specific results of the company during a given period of time.
    How many real balances has AR presented in the last three years ? ZERO.NONE. Just one "management report" with generalities that no one can really audit financially speaking. The smell of corruption is all over, simple like that.

    Quoting something (Reply 39):
    The company also seems a bit unimaginative.

    That is what happens when you put in charge people who are not properly qualified or even interested in save the company or improve the customer service. You need Innovation and rational organization for all that you mention above, also requires hard work.... but if the money just "rains from the sky" with little or zero control, why bother ??
    I'm still waiting someone can tell me why the actual managers of AR are in that position. I "suspect" is just because they are relatives or friends of the President. And I'm being ironic. Almost all Argentinians know that is the reason. Blaming the source ( Clarin lies, La Nacion lies ) is the typical reaction of killing the messenger when he gave the bad news.

    Quoting something (Reply 39):
    Aerolinas could use some of that spirit. And money..

    No doubt. But I don't have any hope of seeing that with the current administration, and they will be in charge at least until the end of this presidential period. Unless the government falls apart like in 2001 with De La Rua, is a loooong period of time for a struggling airline.

    G.
    Gear Up!!: DC-3 / EMB-110 / Fairchild-227 / Ab318-19-20-21 / B732 / B763 / B789
     
    MaverickM11
    Posts: 15326
    Joined: Thu Apr 06, 2000 1:59 pm

    RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

    Wed Mar 14, 2012 7:51 pm

    Quoting MD11junkie (Reply 33):
    Many armchair CEOs around here speak because they think they know, and understand.

    Perhaps, but most of these armchairs CEOs know more about the industry than the Argentine government, so pardon us while we wait for AR or Argentina to actually accomplish something constructive.

    Quoting something (Reply 39):
    Maybe Etihad can buy a majority stake in them and bring some expertise to Buenos Aires.

    EY/EK/QR wouldn't have a clue what to do with the issues facing AR--they've never had to deal with any of AR's obstacles.

    Quoting jfk777 (Reply 37):
    IF LAN becomes the defacto national airline there is nothing to be emabrrased about, it happened in Peru and Brazil.

       Like I said, they're holding onto Aeroperu for dear life. And to what benefit? The unions?
    E pur si muove -Galileo
     
    AR385
    Posts: 6742
    Joined: Fri Nov 07, 2003 8:25 am

    RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

    Wed Mar 14, 2012 8:09 pm

    Quoting Gonzalo (Reply 40):
    any serious company in the world publishes its Financial Balance annually,

    Wrong. Only PUBLIC companies are required to do that, in most countries. AR, as a state owned company, is not required to do that, as far as I know.
     
    Gonzalo
    Topic Author
    Posts: 1527
    Joined: Tue Aug 23, 2005 2:43 am

    RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

    Wed Mar 14, 2012 8:36 pm

    Quoting AR385 (Reply 42):
    Wrong. Only PUBLIC companies are required to do that, in most countries

    But there is no law forbidding to do that, and I can tell you, I know at least a few dozens of PRIVATE companies here in Chile who publishes the financial results every year, no matter was a good year with blue numbers or a bad one with glowing red numbers. In fact I work for one private company who does that and you can find the book with the results of the year 2011 in the coffee table in the hall of reception, and no one care too much about who read it or take a copy for analysis. It is called transparency, and generates TRUST in who or what you are, and the way you do business.



    Quoting AR385 (Reply 42):
    AR, as a state owned company, is not required to do that, as far as I know.

    Should be. In a country with many social issues to attend like Argentina, any company where 2,2 million dollars evaporate every single day, should be. Just for respect to the less fortunate people who struggles to survive every day. Just my humble opinion.

    Rgds.

    G.
    Gear Up!!: DC-3 / EMB-110 / Fairchild-227 / Ab318-19-20-21 / B732 / B763 / B789
     
    AR385
    Posts: 6742
    Joined: Fri Nov 07, 2003 8:25 am

    RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

    Wed Mar 14, 2012 8:41 pm

    Quoting Gonzalo (Reply 43):
    But there is no law forbidding to do that, and I can tell you, I know at least a few dozens of PRIVATE companies here in Chile who publishes the financial results every year,

    Dumb strategic move, if you ask me. I know very few companies that are not required by law that go ahead and publish their financial data. It makes no sense.

    Quoting Gonzalo (Reply 43):
    Should be.

    That´s your opinion.

    [Edited 2012-03-14 13:45:48]
     
    Gonzalo
    Topic Author
    Posts: 1527
    Joined: Tue Aug 23, 2005 2:43 am

    RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

    Wed Mar 14, 2012 9:55 pm

    Quoting AR385 (Reply 44):
    Dumb strategic move, if you ask me.

    Really? If it is a dumb move, can I ask you why some of the private corporations who actually do this here, are so damn successful ?
    Just a few examples : CENCOSUD, the Chilean giant of Retail who owns JUMBO supermarkets among other big companies. Not exactly a failure in the business world, you know. COPEC ( you can learn about the company in the website with the same name ). ENAEX, one of the biggest players in the mining/explosives market. ENTEL, a big company of AND Irtysh-Avia (Kazakhstan)">IT. And I could go on and on. All of them have their information available. Even LAN has a public report WITH the financial status of the company.
    I guess all the managers of this companies are crazy or, like you said, they are "dumb" ?
    You can be successful AND Transparent. Commercial strategies are not a big mystery, and you can run an airline or any other business while sowing confidence with the customers, the authorities and the general public at the same time.

    AR should be a much more transparent company, their direct competitors doesn't need any "strategic information" that AR can hide to know how to play in the market, and like I said before, it is a matter of respect to the people who are, at the end, financing the company, the common people who paid taxes every single day when they buy a candy bar.

    Rgds.
    G.
    Gear Up!!: DC-3 / EMB-110 / Fairchild-227 / Ab318-19-20-21 / B732 / B763 / B789
     
    AR385
    Posts: 6742
    Joined: Fri Nov 07, 2003 8:25 am

    RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

    Thu Mar 15, 2012 2:38 am

    Quoting Gonzalo (Reply 45):
    Really? If it is a dumb move, can I ask you why some of the private corporations who actually do this here, are so damn successful ?
    Just a few examples : CENCOSUD, the Chilean giant of Retail who owns JUMBO supermarkets among other big companies. Not exactly a failure in the business world, you know. COPEC ( you can learn about the company in the website with the same name ). ENAEX, one of the biggest players in the mining/explosives market. ENTEL, a big company of AND Irtysh-Avia (Kazakhstan)">IT. And I could go on and on. All of them have their information available. Even LAN has a public report WITH the financial status of the company.

    Thank you for the lesson. Let me add to what you wrote:

    CENCOSUD is a publicly listed company, thus, has an obligation to post its financials publicly.
    COPEC is also publicly listed, so...
    ENTEL is also publicly listed, and 55% of it is owned by Telecom Italia, so I would not call it exactly a "Chilean company"
    ENAEX is also publicly listed.
    LAN is also publicly listed, at the NYS of all places.

    I dont´really know what you mean by "ENTEL, a big company of AND Irtysh-Avia (Kazakhstan)">IT."

    So yes, all those companies are publiclty listed. That is why their financials are available. So, I maintain what I said. Dumb move to put your financials out there if you are not required to.

    As for AR, sure, everybody would like them to be more transparent. The fact is they are not and probably another reason why they are in the state they are. But the Argentine government is not looking for investors, so what´s the point?
     
    SJOtoLIR
    Posts: 2426
    Joined: Thu Jul 19, 2007 12:41 pm

    RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

    Thu Mar 15, 2012 3:26 am

    Quoting something (Reply 39):
    Maybe Etihad can buy a majority stake in them and bring some expertise to Buenos Aires.

    Marsans tried unsuccessfully to improve the situation on AR.




    .

    Quoting something (Reply 39):
    Maybe they could join Star Alliance and start flights into MUC

    The current financial situation on AR is totally unappealing for the interests of any global alliance.

    Regards.
    "Goin' up to the spirit in the sky"
     
    LipeGIG
    Posts: 5050
    Joined: Tue May 03, 2005 7:33 am

    RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

    Thu Mar 15, 2012 3:38 am

    Quoting SJOtoLIR (Reply 47):
    The current financial situation on AR is totally unappealing for the interests of any global alliance.

    Agreed. Plus against AR the fact that their network is limited to ... Argentina.
    AV, TA and G3, are for sure better assets.
    New York + Rio de Janeiro = One of the best combinations !
     
    something
    Posts: 1239
    Joined: Fri May 13, 2011 5:29 pm

    RE: AR Bleeding : Daily Loses Of 2.2 Million Dolars

    Thu Mar 15, 2012 6:08 am

    Quoting AR385 (Reply 42):
    Quoting Gonzalo (Reply 40):
    any serious company in the world publishes its Financial Balance annually,

    Wrong. Only PUBLIC companies are required to do that, in most countries. AR, as a state owned company, is not required to do that, as far as I know.

    I suppose the requirements are different in every country, as to who has to publish what, when and where. In Germany every Ltd. (''Kapitalgesellschaft'') has to publish their annual balance and and profit/loss statement. The willingness of companies to publish their figures depends entirely on the company though. There are some companies who don't have to publish them but still do, and others who are obligated to but go to great lengths to circumvent this requirement (restructure the company into a corporation, downsize it, move the HQ abroad etc.).

    I don't think it's a particular burden if every company is treated the same and has to do the same. And especially in a rather corrupt area of the world where nepotism runs wild, I have to agree with Gonzalo that the added level of transparency could potentially help the situation there. But then again, how rational is the average Argentine voter?

    Quoting Gonzalo (Reply 40):
    I'm still waiting someone can tell me why the actual managers of AR are in that position. I "suspect" is just because they are relatives or friends of the President. And I'm being ironic. Almost all Argentinians know that is the reason.

    It would be sad if that's the case, especially since those are all jobs unemployed, but highly qualified people could do.

    Quoting SJOtoLIR (Reply 47):
    Quoting something (Reply 39):
    Maybe Etihad can buy a majority stake in them and bring some expertise to Buenos Aires.

    Marsans tried unsuccessfully to improve the situation on AR.

    Maybe their strategy wasn't right; or maybe AR is under so much gov't control that it doesn't leave investors a whole lot of economic freedom.
    ..sick of it. -K. Pilkington.