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dcajet
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Uruguay's only airline reduces operations & lays off staff

Sat Feb 23, 2019 4:45 pm

Amaszonas Uruguay (a unit of Bolivia's Amaszonas) is in dire straits: will reduce flying by 50%, return one of its 2 CRJ-200s and operate only one daily flight to Buenos Aires AEP and another to Asuncion ASU and Santa Cruz VVI. The airline will lay off 36 of its 74 workers and is asking for government subsidies and a reduction in taxes and fuel cost. Uruguay has the highest jet fuel price and airline/airport taxes in the region.

The de facto flag carrier for Uruguay blames soft demand from Argentina and Brazil as well as the high cost inherent to operations in Uruguay.

https://www.elobservador.com.uy/nota/am ... yeM6sXSqjE

Since PLUNA's bankruptcy in 2011, Uruguay's airline sector has been nothing but a litany of bad news, with the bankruptcies of Alas Uruguay and BQB Lineas Aereas. Too small a market to support a home grown airline, it relies on its two neighbors, Argentina and Brazil for feed to any national airline. And these usually don't stand a chance with the airlines from its two larger neighbors. High operating costs also make Uruguay a destination that oftentimes doesn't spell profits for international airlines: this year alone, Avianca has announced it is ending its BOG-MVD service and SKY Airline is ending its SCl_MVD flights.
Keep calm and wash your hands.
 
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mercure1
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Re: Uruguay's only airline reduces operations & lays off staff

Sat Feb 23, 2019 5:12 pm

Wonderful country, but terrible luck at airlines.
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C010T3
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Re: Uruguay's only airline reduces operations & lays off staff

Sat Feb 23, 2019 5:21 pm

I really don't get why Uruguay would need an airline.
 
ODwyerPW
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Re: Uruguay's only airline reduces operations & lays off staff

Sat Feb 23, 2019 5:49 pm

Interesting country.... More than twice the Size of Ireland, with nearly half of it's population and a 1/3 to 1/4 of it's GDP (depending on what years/formulas you use as your basis).
learning never stops.
 
dcajet
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Re: Uruguay's only airline reduces operations & lays off staff

Sat Feb 23, 2019 6:17 pm

ODwyerPW wrote:
Interesting country.... More than twice the Size of Ireland, with nearly half of it's population and a 1/3 to 1/4 of it's GDP (depending on what years/formulas you use as your basis).


And over 1/3 of the population living in the capital city, Montevideo and the rest spread over a handful of small cities, none too far from Montevideo.

C010T3 wrote:
I really don't get why Uruguay would need an airline.


Agree. Lets see if the local politicians have learned the lesson after the Alas Uruguay fiasco. If they divert public funds to aid Amaszonas, we know they have not.
Keep calm and wash your hands.
 
airevents
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Re: Uruguay's only airline reduces operations & lays off staff

Sat Feb 23, 2019 6:37 pm

It´s probably sad but true: tiny Uruguay does not need its own airline. It´s a matter of national pride maybe but not a sound business case. Airlines like Aerolíneas, GOL and others will make sure that Montevideo and Punta del Este get connected to other places in the region and that´s that. I have very happy memories of the good old PLUNA days (spent four months in Uruguay as a student when they still flew their Boeing 707 to Madrid) but I don´t think in today´s place and time, there is a place and need for a Uruguayan airline.
 
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PatrickZ80
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Re: Uruguay's only airline reduces operations & lays off staff

Sat Feb 23, 2019 7:08 pm

mercure1 wrote:
Wonderful country, but terrible luck at airlines.


This has nothing to do with luck, more with terrible conditions (super high operating costs and taxes). Any airline based in Uruguay would have an instant disadvantage compared to foreign airlines that are subject to far better conditions.
 
dcajet
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Re: Uruguay's only airline reduces operations & lays off staff

Sun Feb 24, 2019 4:27 pm

Adding to the airline malaise at MVD, American is reducing frequencies on the MIA-MVD route, eff. Sept. AA 984/5 goes from daily to 5x w, operated with the 763ER.
Keep calm and wash your hands.
 
AAtakeMeAway
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Re: Uruguay's only airline reduces operations & lays off staff

Sun Feb 24, 2019 7:18 pm

What's the reason the operating costs are so high there?
 
dcajet
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Re: Uruguay's only airline reduces operations & lays off staff

Mon Feb 25, 2019 8:24 pm

AAtakeMeAway wrote:
What's the reason the operating costs are so high there?


Specifically regarding the industry, high aviation & airport taxes/fees and the highest cost of fuel in South America; a very small aviation market. At a broader country level, I'd rather leave the explaining to the locals,
Keep calm and wash your hands.
 
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ClipperYankee
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Re: Uruguay's only airline reduces operations & lays off staff

Mon Feb 25, 2019 11:15 pm

When I visited a few years ago and arrived via EZE on a United flight there were exactly three aircraft at MVD. Our 767, one from American and I think a local DHC-8. There might have been one or two small general aviation aircraft but at a peak time there were only three passenger aircraft at the country's main airport and two were from U.S. airlines. I think the market is rather small.
Loved Montevideo, nice town and incredible steaks. Aviation might be expensive but visiting was very affordable.
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NTLDaz
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Re: Uruguay's only airline reduces operations & lays off staff

Mon Feb 25, 2019 11:18 pm

dcajet wrote:
Amaszonas Uruguay (a unit of Bolivia's Amaszonas) is in dire straits: will reduce flying by 50%, return one of its 2 CRJ-200s and operate only one daily flight to Buenos Aires AEP and another to Asuncion ASU and Santa Cruz VVI. The airline will lay off 36 of its 74 workers and is asking for government subsidies and a reduction in taxes and fuel cost. Uruguay has the highest jet fuel price and airline/airport taxes in the region.

The de facto flag carrier for Uruguay blames soft demand from Argentina and Brazil as well as the high cost inherent to operations in Uruguay.

https://www.elobservador.com.uy/nota/am ... yeM6sXSqjE

Since PLUNA's bankruptcy in 2011, Uruguay's airline sector has been nothing but a litany of bad news, with the bankruptcies of Alas Uruguay and BQB Lineas Aereas. Too small a market to support a home grown airline, it relies on its two neighbors, Argentina and Brazil for feed to any national airline. And these usually don't stand a chance with the airlines from its two larger neighbors. High operating costs also make Uruguay a destination that oftentimes doesn't spell profits for international airlines: this year alone, Avianca has announced it is ending its BOG-MVD service and SKY Airline is ending its SCl_MVD flights.


Having been to Uruguay a couple of times it sure is a tough place for an airline. Montevideo's proximity to BsAs doesn't help as well as not having any real need for a domestic network.

Just checking on PLUNA's bankruptcy date. I flew them from SCL to MVD in April 2012.
 
AtomicGarden
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Re: Uruguay's only airline reduces operations & lays off staff

Tue Feb 26, 2019 1:05 am

Regarding the fuel costs, is it too ridiculous to fill up the tank in other countries when they fly there?
You killed a black astronaut, Cyril! That's like killing a unicorn!
 
dcajet
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Re: Uruguay's only airline reduces operations & lays off staff

Thu Apr 18, 2019 4:21 pm

As it had been announced, the only airline left flying the Uruguay flag has reduced itself to one CRJ-200 and 12 weekly flights:

* Z7 740/41 daily MVD-ASU-VVI-ASU-MVD

* Z7 758/9 5x w MVD-AEP-MVD

Sources from within the airline say there are plans to replace the single CRJ-200 with an E195, but I personally think there is no basis to those plans. I really don't know how they will be able to survive, particularly having cut so much the MVD-AEP flight, traditionally a cash cow. It must be impossible to compete with AR&AU many daily flights to both AEP & EZE with E190 and 738 equipment. The CRJ-200 economics have to sting big time.

Apparently a rescue package from the Uruguay government in the form of cheaper jet fuel was in the works, but I am not certain where that one will end up.
Keep calm and wash your hands.

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