Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

 
User avatar
LAXintl
Topic Author
Posts: 25084
Joined: Wed May 24, 2000 12:12 pm

AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sat Feb 27, 2016 6:03 pm

With new government in place, Aerolinean Argentinas also has a new CEO as well with a mandate to finally turn the heavily loss making government airline around.
Its reported recent year accumulated losses have topped USD $1 Billion. In 2015 the government had to pump near $660mil subsidy to AR and sister Austral Airline and seeks to reduce this to $300mil in coming year.

As part of this process the new CEO Isela Costantini is drawing up a 4-year plan which initially call for:

o Close down "heavily uneconomic" longhaul routes to Barcelona, New York and Rome
o Ground its 7 A340 fleet, retaining 6 A330s for remaining longhaul
o Initial staff reductions - seek to offer early retirements. Between AR and AU they are overstaffed with 12,690 employees.
o Either sale or full merger of Austral which stuck operating many unprofitable domestic routes.
o Reduce non-operating cost by 30%
o Reduce dependence on many poorly negotiated expensive leased aircraft
o Attend to creditors. For example AR is $60mil behind in payments to Boeing

Its also interesting to note LAN Argentina ex-CEO Gustavo Lopetegui was brought in by the new government as adviser to the presidents chief of staff.
In addition the Ministry of Transportation is in process of authorizing deregulation of domestic ticket pricing which will allow airlines to adjust fares without authorization

Multiple stories
http://www.diarioregistrado.com/econ...rgentina_a56d046bb6d17a1770792b432
http://www.ieco.clarin.com/Isela-Cos...juste-Aerolineas_0_1529247510.html
http://tn.com.ar/economia/isela-cost...ecortes-por-us-100-millones_654887
http://www.cronica.com.ar/article/de...el-ajuste-en-aerolineas-argentinas
http://www.ch-aviation.com/portal/ne...ew-ceo-outlines-restructuring-plan

=

Of course much of this is dependent on how unions react at the airline. The company has long had difficult relations with its unions whom have in recent years enjoyed benefits from leftist governments.
From the desert to the sea, to all of Southern California
 
pipeafcr
Posts: 430
Joined: Sat Jun 13, 2009 1:47 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sat Feb 27, 2016 7:20 pm

Those routes that were dropped shock me, but I guess FCO and BCN had to go because they require the 340 for the job. I would have dropped some of its many Brazilian routes, CCS, and BOG, and focus mainly on domestic and regional routes
Felipe Carrillo
 
User avatar
ghost77
Posts: 4585
Joined: Wed Mar 01, 2000 2:07 pm

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sat Feb 27, 2016 7:23 pm

They not longer have the government aid...

Some common sense...

g77
 
dennys
Posts: 693
Joined: Tue May 08, 2001 11:19 pm

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sat Feb 27, 2016 7:33 pm

They also use the 340 where a 330 could make the job : South America and USA .
 
User avatar
ghost77
Posts: 4585
Joined: Wed Mar 01, 2000 2:07 pm

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sat Feb 27, 2016 7:36 pm

BTW, been told CUN is also closing.

g77
 
User avatar
jsnww81
Posts: 2542
Joined: Mon Jan 28, 2002 3:29 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sat Feb 27, 2016 7:46 pm

Well it HAS been a few months, so it's time for another restructuring plan at AR! They ought to form a "constant restructuring alliance" with Alitalia, Airberlin, Sri Lankan, South African and Malaysia.

AR should take a look at airlines like Qantas, Iberia and JAL that made the painful changes, dropped the loss-making routes, rationalized staff and moved forward. It was ugly and unpleasant but all three emerged in a better position to compete.

Quoting LAXintl (Thread starter):
Either sale or full merger of Austral which stuck operating many unprofitable domestic routes.

The preservation of two different brands - Austral and Aerolineas - on domestic routes has always been among the silliest attributes of AR. There's literally no difference between the two.

Quoting LAXintl (Thread starter):
overstaffed with 12,690 employees.

This is nuts if accurate. What are all those people doing?
 
Byrdluvs747
Posts: 2546
Joined: Thu Jul 15, 2004 5:25 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sat Feb 27, 2016 8:32 pm

Quoting LAXintl (Thread starter):
o Either sale or full merger of Austral...

If they put the airline up for sale, who would be able to buy it? Wouldn't foreign ownership restrictions hinder a purchase by anyone other than LAN Argentina (if they would want it) ?
The 747: The hands who designed it were guided by god.
 
User avatar
DolphinAir747
Posts: 1901
Joined: Tue Jun 12, 2012 10:07 pm

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sat Feb 27, 2016 8:39 pm

How is AZ doing on FCO-EZE? The monopoly should help now!
 
SCQ83
Posts: 5831
Joined: Wed Oct 03, 2012 8:32 pm

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sat Feb 27, 2016 8:42 pm

Are they keeping COR-MIA?

It is interesting BCN losing Buenos Aires; there is a large Argentinian community in the city. That should be very positive for LATAM's new BCN-GRU connecting further to EZE.

So BCN will have no flights to EZE, while MAD has three carriers (Iberia, Aerolineas and Air Europa).
 
aircanadaa330
Posts: 245
Joined: Thu Aug 21, 2008 5:28 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sat Feb 27, 2016 9:49 pm

Quoting jsnww81 (Reply 5):
Well it HAS been a few months, so it's time for another restructuring plan at AR!

my thoughts exactly, AR needs to get their house cleaned up.

Quoting Byrdluvs747 (Reply 6):
If they put the airline up for sale, who would be able to buy it? Wouldn't foreign ownership restrictions hinder a purchase by anyone other than LAN Argentina

I thought foreign ownership was allowed in Argentina


IIRC years ago the government regulated domestic prices, if this is true does the government still regulate prices?
Cheers;
 
eielef
Posts: 726
Joined: Tue Oct 09, 2007 4:07 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sat Feb 27, 2016 10:14 pm

I vote for re-privatizing AR and leaving AU as the state owned airline, flying only domestic, with a mix of ERJ170, 190 and A319 or B737-700, good hub in AEP, some touristic corridors as today (IGR-SLA-MDZ-BRC-USH) and not much more.
AR has most of the debts, and has a very poor image everywhere. AU has no image abroad, and actually domestic Argentina makes pretty decent money (at least more than international).
Myself, as an argentine taxpayer (former), I've never been happy with the idea of my taxes financing an airline taking people to Miami or Europe, but I've been happy with financing an airline moving argentineans through their very big country, mostly because I grew in a small city, where the AR/AU flights where the only link to the "world" besides buses (ad 20 hours rides).
LAN will grow, or a new Avianca Argentina will be born, or something better will happen. AR is a dark whole, mostly because it's been bad managed for the last 20 years (not only Recalde's fault).
AU is not much better, but at least has some social/humanitarian raison-d'être, while AR, in my opinion, has none.
Domestic routes today operated by AR could be easily send to AU, just changing the first digit on the flight (call it AR1472 now will be AU2472).
AR pays among the most expensive leasings for all of its fleets, specially the 737-700s, so that's why Constantini doesn't want them any more.
The A340 would be bad to take them without waiting their contract to finish (all expected between 2017 and 2019), as it happened with the MDs, B744s and B735s, some of them we still were paying their leasings, though they haven't flown for over 3 years, and no crew has the habilitations to fly them anymore, not even as a ferry flight somewhere else...
 
dcajet
Posts: 4816
Joined: Sun Aug 01, 2004 9:31 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sat Feb 27, 2016 10:42 pm

Quoting aircanadaa330 (Reply 9):
I thought foreign ownership was allowed in Argentina


IIRC years ago the government regulated domestic prices, if this is true does the government still regulate prices?

51% has to be in Argentinean hands.
.

The domestic market was deregulated in the 90's under the Menem administration, which led to remarkable growth in the number of airlines (LAPA, Dinar et al) and domestic traffic. All this came undone after the 2001 default, which saw the new airlines collapse leaving only Aerolineas and Austral. Beginning in 2003, the governme66nt took a more interventionist approach, allowing in 2006 the creation of LAN Argentina, but intervening once again in the regulation of air fares, with a policy called "bandas tarifarias". In 2008 the Cristina Kirchner took matters into new heights as it took control of Aerolineas Argentinas SA which was until then controlled by Marsans of Spain, and facing collapse. Since then AR has been a true predator in the local market, with the backing of the Treasury and became a job creation scheme for the cronies of the Kirchners.

Good luck to AR; much needed reforms.
Keep calm and wash your hands.
 
toltommy
Posts: 2809
Joined: Tue Dec 09, 2003 9:04 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sat Feb 27, 2016 10:58 pm

Quoting eielef (Reply 10):
I vote for re-privatizing AR and leaving AU as the state owned airline
Quoting eielef (Reply 10):
I've been happy with financing an airline moving argentineans through their very big country
Quoting eielef (Reply 10):
LAN will grow, or a new Avianca Argentina will be born, or something better will happen

You won't get growth from LAN or Avianca Argentina if you want a state controlled carrier to shuttle between Argentine cities. You need your new government to get out of the way. AU needs to adapt or die. The market needs to support what it can support. No new airline will invest in the market if the government will simply protect government jobs by protecting the routes. A free market will get you LAN or Avianca Argentina. It may also get you someone building an Argentine ULCC along the likes of a Ryanair or Spirit. Those carriers will create jobs that will replace the jobs lost as AU and AR adapt or die. One simply cannot keep doing the same things over and over and expect a different result. A government owned subsidized carrier simply cannot be the answer if you want something better than what you already have.
A300/A310/A319/A320/A321/A332/A333 / 707/712/727/732/733/734/735/738/739/752/753
/762/763/764/772/788/789/DC8/DC9-10/30/40/50/MD81/83/87/88/90/L1011-/250/500/CRJ200/440 /700/900/EMB135/140/145/170/175/190/328Jet/F70/SF3/BE1/J31
 
dcajet
Posts: 4816
Joined: Sun Aug 01, 2004 9:31 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sun Feb 28, 2016 3:39 am

Quoting jsnww81 (Reply 5):
The preservation of two different brands - Austral and Aerolineas - on domestic routes has always been among the silliest attributes of AR. There's literally no difference between the two.


Main reason for keeping the two brands has been labor issues, largely on the pilots side. In the event of a merger, AR pilots, under the APLA union want AU pilots to go to the bottom of the seniority list. AU pilots, under tne UALA union, beg tp differ, naturally.
Keep calm and wash your hands.
 
User avatar
Gonzalo
Posts: 1860
Joined: Tue Aug 23, 2005 2:43 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sun Feb 28, 2016 3:55 am

Quoting LAXintl (Thread starter):
Of course much of this is dependent on how unions react at the airline.

This will be the hardest part in the plan. There is a cultural problem in some countries, including Argentina, where the people taking advantage of a job paid by the taxpayers has the condition of a holly cow, and you can get rid of them only if you caught the guy commiting a crime with the gun in his hand and chewing the heart of the victim. Otherwise, for example, if you need to cut the fat and get rid of 3 or 4 thousand useless people doing nothing (except sucking money), you will be involved in a painful battle with strikes and fights.

Rgds.
Gear Up!!: DC-3 / EMB-110 / FH-227 / A318-19-20-21 / B732 / B763 / B789 / B788 / A343 / ATR72-600
 
jfk777
Posts: 7442
Joined: Tue Aug 22, 2006 7:23 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sun Feb 28, 2016 7:23 am

Welcome to the pre-qual to the second privatization of AR.
 
migair54
Posts: 2461
Joined: Thu Jun 14, 2007 4:24 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sun Feb 28, 2016 9:15 am

Quoting SCQ83 (Reply 8):
So BCN will have no flights to EZE, while MAD has three carriers (Iberia, Aerolineas and Air Europa).

there must a reason, I know BCN is always requesting long haul but it's not easy to make it work.

I heard that now that IAG has huge profits and things are much smooth in IB, maybe IB will try to make some long haul from BCN.

Quoting LAXintl (Thread starter):
o Close down "heavily uneconomic" longhaul routes to Barcelona, New York and Rome
o Ground its 7 A340 fleet, retaining 6 A330s for remaining longhaul
o Initial staff reductions - seek to offer early retirements. Between AR and AU they are overstaffed with 12,690 employees.
o Either sale or full merger of Austral which stuck operating many unprofitable domestic routes.
o Reduce non-operating cost by 30%
o Reduce dependence on many poorly negotiated expensive leased aircraft
o Attend to creditors. For example AR is $60mil behind in payments to Boeing

All seem very logical, it's kind of crazy how an airline can be almost 13.000 employees over staff, that poorly negotiated leases smell like some under the table commissions.

I agree that selling AR could be a good option but before that they need to arrange things a bit, otherwise nobody will buy that sinking boat.

Quoting dcajet (Reply 13):
Main reason for keeping the two brands has been labor issues, largely on the pilots side. In the event of a merger, AR pilots, under the APLA union want AU pilots to go to the bottom of the seniority list. AU pilots, under tne UALA union, beg tp differ, naturally.

And I don't think they will find a solution for that, so keeping both separated is better for now, I think both airlines could work very good together but the management was not very good on doing it.
 
LPSHobby
Posts: 454
Joined: Tue May 01, 2007 9:14 pm

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sun Feb 28, 2016 9:24 am

we will see a groweh of LAN Argentina now? I always had the impression that the old government didý alloe LAN to grew in Argentina
 
eielef
Posts: 726
Joined: Tue Oct 09, 2007 4:07 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sun Feb 28, 2016 9:51 am

Quoting toltommy (Reply 12):
You won't get growth from LAN or Avianca Argentina if you want a state controlled carrier to shuttle between Argentine cities. You need your new government to get out of the way. AU needs to adapt or die. The market needs to support what it can support. No new airline will invest in the market if the government will simply protect government jobs by protecting the routes

I don't think that's the idea of the new government. My first opinion, in July 2008, was: make LADE grow, the Air Force airline. Or something similar (runner by civilian pilots, with newer and safer aircraft) that goes where no-one else wants to fly, maybe because of few population, or few commercial interest, or few tourism, or a very poor region. Is not even the case of airports in bad conditions, that need special planes (for instance, planes which land only on grass runways). All destinations served by AR (and even by 5U) can be served by standard commercial jet-planes.

So the only obstacle is economic. Make something like the US Essential Air Service aprox 40 cities from AEP.
AU has the fleet and the people for it. If not AU or not AR, make it a new state owned and state controlled airline.
And leave other airlines to grow domestically to those places where it is convenient for them, such as 4M has done, albeit so many limitations given by the previous government.
And the current government is completely against protecting any jobs or any routes. You can read how many people from the state administration has been fired in the first few weeks of the new government, which are thousands, some of them unfair, some of them not. But having a state on severe deficit budgets, and lacking much more important infrastructure (e.g. the construction of highways, the reconstruction of the Railways for freight and passengers, the improved of the electric system in the country which every summer collapses, even the implementation of 4G technology or better communications which are among the worse of Latin America and also the most expensive ones)....
Well, we can't afford billions spent on an airline as AR that, either with B742, B744, A342, A343 or A332 losses money flying to Europe or the US...

And myself, as being from a city outside Buenos Aires, I've been forced for almost 4 years (2004 to 2008) to take the erratical flights of AR, which at one point were less than 17 weekly, most of them delayed, at exorbitant prices. And the world kept moving on. And I am from the 5th largest city in the country, with about 0,8Mio people, 1300km away from Buenos Aires. Our airport dropped from 500k pax/year to 180k pax/year, and now is slightly over 550k/year, albeit no flights to anywhere else than AEP (stats of 2015, with new flights to COR are not available yet).
 
debonair
Posts: 4066
Joined: Sat Jan 03, 2004 10:50 pm

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sun Feb 28, 2016 10:18 am

Quoting pipeafcr (Reply 1):
Those routes that were dropped shock me, but I guess FCO and BCN had to go because they require the 340 for the job

Wasn't the A330 announced for FCO?
 
peterinlisbon
Posts: 1868
Joined: Wed Feb 01, 2006 3:37 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sun Feb 28, 2016 12:01 pm

It's a good thing that they are at last stopping the regulation of air fares. Last time I was in Argentina found a good price online for a ticket from Salta to BA, but then found out that I would have to pay 3 times the price because I'm a foreigner. So of course, I took the bus and never even looked at their silly airfares again.

I hope that the new government can persue policies that help its airlines develop without smothering them and controlling them.
 
eielef
Posts: 726
Joined: Tue Oct 09, 2007 4:07 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sun Feb 28, 2016 12:47 pm

Quoting peterinlisbon (Reply 21):
It's a good thing that they are at last stopping the regulation of air fares. Last time I was in Argentina found a good price online for a ticket from Salta to BA, but then found out that I would have to pay 3 times the price because I'm a foreigner. So of course, I took the bus and never even looked at their silly airfares again.

When I was a law student, not long ago, I questioned authorities, law professors, and aviation specialists and they've never found a legal ground for this differential fares for foreigners, which are against Law 24240 section 8Bis, which says:

Quote:
Foreign User Protection: foreign consumers or users shall be considered as nationals in relation to prices or other commercial terms and conditions.

So, if you decide to pay the Argentine's fare (as many foreigners do it still today) no-one will prevent you to board the plane... Or no extra charges will be given to you at the airport, or on your credit card, or nothing.
 
PRAirbus
Posts: 741
Joined: Wed Apr 20, 2005 11:59 pm

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sun Feb 28, 2016 3:18 pm

Is AR still serving NZ; ANZ will surely make ARs life more difficult; ANZ has better everything compared to Argentinas.
 
User avatar
aerorobnz
Posts: 8368
Joined: Sat Feb 10, 2001 3:43 pm

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sun Feb 28, 2016 3:40 pm

Quoting PRAirbus (Reply 22):
Is AR still serving NZ; ANZ will surely make ARs life more difficult; ANZ has better everything compared to Argentinas.

No, they left the market to fly EZE-SYD and then pulled out. NZ/AR codeshare on the route.
Flown to 147 Airports in 62 Countries on 83 Operators and counting. Wanderlust is like Syphilis, once you have the itch it's too late for treatment.
 
Armodeen
Posts: 1272
Joined: Wed Aug 28, 2013 10:17 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sun Feb 28, 2016 4:21 pm

Quoting migair54 (Reply 16):

I heard that now that IAG has huge profits and things are much smooth in IB, maybe IB will try to make some long haul from BCN.

IAG don't believe in regional long haul...they like the central hub method. I highly doubt IB will do anything out of BCN.
 
EddieDude
Posts: 7048
Joined: Fri Nov 14, 2003 10:19 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sun Feb 28, 2016 6:36 pm

Quoting ghost77 (Reply 4):
BTW, been told CUN is also closing.

So their long-haul network will essentially be EZE-MAD/MIA? Not much they can do with only six A332s. Perhaps launch ATL or MEX to leverage their SkyTeam membership?
Upcoming flights:
April/May: AM MEX-SCL 788 (J), AM EZE-MEX 789 (J).
 
pipeafcr
Posts: 430
Joined: Sat Jun 13, 2009 1:47 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sun Feb 28, 2016 7:56 pm

Now it came to light that AV is interested in acquiring an airline in Argentina, with Austral and Macair Jet (an airline owned by the Macri family) as the two most latent options. Apparently the Government is seeing the potential incursion of AV into argentina with good eyes.

Reference in Spanish only:
http://tn.com.ar/economia/el-dueno-d...ar-una-aerolinea-en-el-pais_655396

Thoughts on how this might reflect on Aerolineas?
Felipe Carrillo
 
dcajet
Posts: 4816
Joined: Sun Aug 01, 2004 9:31 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sun Feb 28, 2016 8:09 pm

Quoting EddieDude (Reply 25):
So their long-haul network will essentially be EZE-MAD/MIA? Not much they can do with only six A332s. Perhaps launch ATL or MEX to leverage their SkyTeam membership?

As of today, all these changes have not been officially announced and should be taken as rumors. That reforms are coming, no doubt about it, the question is how deep will the knife go in. I am hearing that both BCN and FCO will be cut no doubt, but JFK may remain. So in addition to MIA, MAD and potentially JFK, the long haul network includes CUN, HAV, PUJ, CCS, BOG and LIM. Then closer to Argentina you have MVD, PDP, SCL, ASU, VVI, POA, FLN, CWB, GRU, GIG, CNF, BSB and SSA. Codeshares exist with KE to LAX from GRU, to points in Europe via AMS on KL and to AKL on NZ, in addition to an extensive number of destinations in the US with DL from both ATL and JFK. I don't think we will see AR adding new international destinations. GYE, UIO and MEX had been announced for later this year but it is safe to assume that those plans are now cancelled.

On a more positive note, a new A332 is scheduled to be delivered to AR in April, it has been assigned the reg LV-GKO and a new 738 LV-GGK arrived last week @ AEP from BFI via CCS. These are aircraft replacements rather than organic growth, the latter replacing 73Gs and the former replacing the soon to be retired A343. On the AU side of the house, two E190s ex Republic are now at Coopesa @ SJC getting the AU interiors and should be in the fleet by March/April, taking the fleet to 24 frames.

Sad to see AR having to face such drastic cuts but can't see any other way out. Years of being managed as an extension of national politics instead of as a business have taken its toll.
Keep calm and wash your hands.
 
dcajet
Posts: 4816
Joined: Sun Aug 01, 2004 9:31 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Sun Feb 28, 2016 9:29 pm

Quoting pipeafcr (Reply 26):
Now it came to light that AV is interested in acquiring an airline in Argentina, with Austral and Macair Jet (an airline owned by the Macri family) as the two most latent options. Apparently the Government is seeing the potential incursion of AV into argentina with good eyes.

Reference in Spanish only:
http://tn.com.ar/economia/el-dueno-d...ar-una-aerolinea-en-el-pais_655396

Thoughts on how this might reflect on Aerolineas?

Apparently the Synergy Group has been doing some due dilligence since the demise of SOL Lineas Aereas, a ROS based regional carrier operating SAAB 340s and Canadair Jets, and owned by a Rosario travel agency, Transatlantica Viajes and Spain's Air Nostrum. Sol had struggled to find its niche over the past years - keep in mind that under the former government, AR made it very difficult to even operate in the domestic market, exercizing a predatory competition that drove SOL out of business, made ANDES pretty much abandon scheduled services and concentrate successfully in the leisure and charter market mostly to Brazil and the Caribbean and put any LAN Argentina expansion plans on hold.

The new government has stated that while selling off AR is not on the table for the time being, they want to liberalize the market, and make AR be self sustainable and not a disrupting force in the marketplace. So if AV wishes to enter the Argentina market, we would not see opposition, at least from the government. Unions at AR may be another story, but AR should be very busy over the next 2-4 years turning itself around, so perhaps Lan Argentina is the one that should worry? For the record, 4M has not announced any new plans yet, but I suspect they are just waiting to see how the market develops over the next 12 months before returning to growth mode after years of being discriminated against by the obtuse policies of Cristina Kirchner.
Keep calm and wash your hands.
 
Planeflyer
Posts: 1528
Joined: Fri Mar 14, 2014 3:49 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Mon Feb 29, 2016 12:20 am

I wish AR and the rest of Argentina all the best turning a very tough, albeit self inflicted situation around.
 
migair54
Posts: 2461
Joined: Thu Jun 14, 2007 4:24 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Mon Feb 29, 2016 2:53 pm

Quoting Armodeen (Reply 24):
IAG don't believe in regional long haul...they like the central hub method. I highly doubt IB will do anything out of BCN.

IAG has a huge hub in BCN with Vueling, so that make it a very good point to connect some pax also, so if they do some long haul from BCN they can offer plenty of destinations in Europe that MAD or LHR can't.
 
Armodeen
Posts: 1272
Joined: Wed Aug 28, 2013 10:17 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Mon Feb 29, 2016 3:06 pm

Quoting migair54 (Reply 30):


IAG has a huge hub in BCN with Vueling, so that make it a very good point to connect some pax also, so if they do some long haul from BCN they can offer plenty of destinations in Europe that MAD or LHR can't.

True. But that just emphasises the point: It's a LCC hub. Do IB do any regional flying out of BCN (other than MAD) or is it all VY?
 
User avatar
mercure1
Posts: 5054
Joined: Sun Jul 13, 2008 5:13 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Mon Feb 29, 2016 3:41 pm

We have been watching the destruction of AR now for two decades.

It might be best to simply shut it down completely and relaunch a new company. Dispose of all debts, and make employees apply for new positions. It could be corpse of AR is too ridden with disease at this stage for yet another restructuring.
mercure f-wtcc
 
flyingcat
Posts: 531
Joined: Tue May 29, 2007 10:33 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Mon Feb 29, 2016 3:52 pm

It's about time Argentina has needed a much more dynamic air service industry, AR has a long hard road of having to cut lots of levels of unnecessary waste however as the US legacies have proven it is possible. AR has the potential to hang on to signifigant share at AEP which is the key to the OD regional market.

EZE and international is another story, operating dual hub operations across town can be difficult and the strength may be on other carriers to serve intercontinental routes.

The biggest winner may be all the airports that are not AEP or EZE. COR has a lot of potential and could be an LCC hub for a reinvigorated Argentine travel market.

If anything a liberal market could be the catalyst for expansion. EZE needs a rail link into town.

Is it impossible to grow AEP? floating island? land reclamation?

Has the new administration broached the travel tax situation?
 
migair54
Posts: 2461
Joined: Thu Jun 14, 2007 4:24 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Mon Feb 29, 2016 3:54 pm

Luckily for AR, they can see some good examples in Europe and try to adapt to their situation, some airlines like IB, Swiss or SN, they have done a nice come back after very complicated situations.

Quoting mercure1 (Reply 32):

We have been watching the destruction of AR now for two decades.

It might be best to simply shut it down completely and relaunch a new company. Dispose of all debts, and make employees apply for new positions. It could be corpse of AR is too ridden with disease at this stage for yet another restructuring.

It's not that easy, they really need to find the way to trim many aspects of the airline and find the way to do it without creating chaos in the airline or in the country.

Quoting Armodeen (Reply 31):
True. But that just emphasises the point: It's a LCC hub. Do IB do any regional flying out of BCN (other than MAD) or is it all VY?

No, they don't have anything, but they have a very large network, and they can offer more services than an only LCC, VIP access, different tariffs, fast track check in, priority boarding, miles with IAG, and some more.
The regional business in many European airlines in only a blocked middle seat and 34 inches pitch, so not a huge difference for 2-3 hours flight.
http://www.vueling.com/es/servicios-...-tarifas-vueling/tarifa-excellence
 
dcajet
Posts: 4816
Joined: Sun Aug 01, 2004 9:31 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Mon Feb 29, 2016 7:20 pm

AR's challenge at both BCN and FCO are low yields, not lack of volume. If BCN would be high yielding, we would see IB flying long haul out of BCN. MAD is where, at least for AR, the desirable yields are.
Keep calm and wash your hands.
 
SCQ83
Posts: 5831
Joined: Wed Oct 03, 2012 8:32 pm

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Mon Feb 29, 2016 8:21 pm

Quoting dcajet (Reply 35):

Aerolineas also codeshares with Air Europa in MAD, so they have their domestic and European network to connect to.
 
MAH4546
Posts: 26467
Joined: Wed Jan 24, 2001 1:44 pm

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Mon Feb 29, 2016 8:38 pm

Quoting EddieDude (Reply 25):
So their long-haul network will essentially be EZE-MAD/MIA? Not much they can do with only six A332s. Perhaps launch ATL or MEX to leverage their SkyTeam membership?

And MIA-COR.

ATL makes no sense - DL has the market taken care of.
a.
 
dcajet
Posts: 4816
Joined: Sun Aug 01, 2004 9:31 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Mon Feb 29, 2016 11:24 pm

Quoting MAH4546 (Reply 37):
ATL makes no sense - DL has the market taken care of.

And they already codeshare on that route.
Keep calm and wash your hands.
 
User avatar
RyanairGuru
Posts: 8559
Joined: Wed Nov 01, 2006 3:59 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Mon Feb 29, 2016 11:37 pm

Quoting jsnww81 (Reply 5):
AR should take a look at airlines like Qantas, Iberia and JAL that made the painful changes, dropped the loss-making routes, rationalized staff and moved forward. It was ugly and unpleasant but all three emerged in a better position to compete.

  

I guess the difference is that all three are former government carriers, that are now privately owned.

The likes of MH, SA, TG etc are still government play things. That makes a huge difference. Every politician wants comprehensive service to their small town and nobody has the balls to make tough decisions for fear of alienating voters. While the signs coming out of the new government in Argentina are promising, IMHO AR needs to be privatised for it to fully reform. There is no reason on paper why AR shouldn't be a strong competitor to LA in southern South America, they just need to be allowed to compete, make profits, and be able to reinvest in their business.

Going back to your point, Air France should definitely be looking at the high stakes game played by IB and QF. It was brutal, it was messy, it was gut wrenching, but it worked.
Worked Hard, Flew Right
 
User avatar
jsnww81
Posts: 2542
Joined: Mon Jan 28, 2002 3:29 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Tue Mar 01, 2016 6:36 am

Quoting RyanairGuru (Reply 39):
Going back to your point, Air France should definitely be looking at the high stakes game played by IB and QF. It was brutal, it was messy, it was gut wrenching, but it worked.

Very true. And once costs are back in line, expansion can resume. Iberia is back in Havana, Santo Domingo and San Juan, and has added Medellin, Cali and Los Angeles. JAL has launched San Diego, Boston, Dallas and Helsinki, and is back on Los Angeles-Osaka. Qantas hasn't done much adding, but they've restructured their network around routes that maximize JV partnerships.

Given the right conditions, AR could very well resume some of the longhaul flying that's being dropped. Time will tell if they'll get those conditions, however.
 
jfk777
Posts: 7442
Joined: Tue Aug 22, 2006 7:23 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Tue Mar 01, 2016 8:01 am

AR is a SkyTeam member but where are the flights to CDG and Atlanta. Madrid and Miami give AR very limited support from their alliance. MIA & MAD are big Argentine destinations but they are not everything to Argentinians in the USA or Europe.
 
LPSHobby
Posts: 454
Joined: Tue May 01, 2007 9:14 pm

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Tue Mar 01, 2016 8:19 am

I would like to have a Macri in Brazil, instead of the current disgovernment...
 
eielef
Posts: 726
Joined: Tue Oct 09, 2007 4:07 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Tue Mar 01, 2016 11:29 am

Quoting jfk777 (Reply 41):
MIA & MAD are big Argentine destinations but they are not everything to Argentinians in the USA or Europe.

I'd say that 90% of those flying with AR won't connect any further, not with UX or DL or nothing.
Check a flight, for instance, on the EZE-FCO-MXP route, the first being offered by AR and the last being offered by AZ. It will be close to 3000USD both ways, while when you buy it with AZ, or UX, or even IB, BA, LH, AF, KL and even AM-Transportes Aereos Meridionais (Brazil)">JJ, it won't be close to 1500USD return. (Similar could be said from the EZE-MAD-AGP flight, or SCQ or LPA or whatever)
There is something wrong with AR+SkyTeam connections, or at least they are way to expensive.
Similar goes to flights in the US, or Canada. None would dare to buy AR+DL in a same ticket, mostly because it will be very expensive. The queen of EZE is AA, with flights to DFW, MIA and JFK, you can practically connect everywhere else in the US or Canada. DL offers its flight to ATL and UA the flight to IAH. That's it. No one else is in Argentina at the moment...
Say you were flying to the West Coast (e.g. LAX, or SFO), many will even chose AM or CM than AR via MIA. Its shorter and, in the best scenario, is a better company and a better service.
 
dcajet
Posts: 4816
Joined: Sun Aug 01, 2004 9:31 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Wed Mar 02, 2016 1:01 am

While FCO, BCN and JFK cuts are, for the time being rumors, as of April, AR is dropping BSB. The current crisis in Brazil makes the flight a loss center. Flights are operated mostly by AU with the E190 or AR with the 73G for days with higher demand. It doesn't help that TAM entered the route in mid 2015 - AR opened the route in 2013 - and there is not enough volume between BSB and EZE for two carriers without a blood bath, something AR can't afford now.
Keep calm and wash your hands.
 
Arcano
Posts: 2301
Joined: Mon Mar 22, 2004 4:34 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Wed Mar 02, 2016 2:01 am

Quoting dcajet (Reply 27):
Then closer to Argentina you have MVD, PDP, SCL, ASU, VVI, POA, FLN, CWB, GRU, GIG, CNF, BSB and SSA

Actually, I regret AR has turned their back against SCL so much... not so many years ago they were a great alternative to conect SCL to the world, with many daily flights, some of them widebodies.
Today, just few Austral flights, embraers, most of them for AEP, weird times.

Not even for weekend shopping they do better, LA has almost unexistant competition in the route and going to BUE for a weekend is more expensive than ever. Only alternative H2, AC and KL, all via EZE and not the best times...



Quoting pipeafcr (Reply 26):
Now it came to light that AV is interested in acquiring an airline in Argentina,

That would be a hit. What are they waiting to set in Chile? Granted open skies with no recoprocity, no limits to foreign ownership and MANY victims of LAN monopoly

As for the topic, why a country needs a flag state owned carrier? Most countries have gone otherway, doing just fine.

Regards!
in order: 721,146,732,763,722,343,733,320,772,319,752,321,88,83,744,332,100,738, 333, 318, 77W, 78, 773, 380, 73G, 788, 789, 346
 
dcajet
Posts: 4816
Joined: Sun Aug 01, 2004 9:31 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Wed Mar 02, 2016 2:43 am

Quoting Arcano (Reply 45):

Actually, I regret AR has turned their back against SCL so much... not so many years ago they were a great alternative to conect SCL to the world, with many daily flights, some of them widebodies.
Today, just few Austral flights, embraers, most of them for AEP, weird times.

Not even for weekend shopping they do better, LA has almost unexistant competition in the route and going to BUE for a weekend is more expensive than ever. Only alternative H2, AC and KL, all via EZE and not the best times.

AR, while still offering connections from SCL via EZE to Europe and the USA with a flight to/from SCL to EZE for that purpose, has concentrated lately on the point to point Argentina-Chile from AEP which is big and higher yielding than connecting low yielding traffic.

While Argentina has become quite expensive for Chileans, the opposite is the case for Argentinians and flights between the two countries are full, mostly with Argentinians bound for a shopping weekend in Santiago,. Even AC and KL are moving 773ERs packed to the brim with happy shoppers between the two cities.
Keep calm and wash your hands.
 
Byrdluvs747
Posts: 2546
Joined: Thu Jul 15, 2004 5:25 am

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Wed Mar 02, 2016 4:06 am

Quoting eielef (Reply 43):
The queen of EZE is AA, with flights to DFW, MIA and JFK, you can practically connect everywhere else in the US or Canada.

I agree. AA/OW has some of the best network (frequency/connectivity) between EZE and the US/Canada.

Quoting eielef (Reply 43):
Say you were flying to the West Coast (e.g. LAX, or SFO), many will even chose AM or CM than AR via MIA.

The most efficient routing to LAX would be EZE-LIM-LAX on LAN.
The 747: The hands who designed it were guided by god.
 
Rafabozzolla
Posts: 988
Joined: Sun Apr 30, 2000 1:27 pm

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Wed Mar 02, 2016 9:30 am

Quoting dcajet (Reply 46):
While Argentina has become quite expensive for Chileans, the opposite is the case for Argentinians and flights between the two countries are full, mostly with Argentinians bound for a shopping weekend in Santiago,.

Really, how come? The Argentinian Peso has suffered a massive devaluation when Macri took office, how is that possible?
 
winGl3t
Posts: 322
Joined: Sun Dec 11, 2011 3:52 pm

RE: AR Restructuring, Ground A340s, Drop BCN, FCO, JFK

Wed Mar 02, 2016 3:17 pm

Quoting dcajet (Reply 44):
Quoting dcajet (Reply 44):
It doesn't help that TAM entered the route in mid 2015 - AR opened the route in 2013 - and there is not enough volume between BSB and EZE for two carriers without a blood bath, something AR can't afford now

GOL also flies BSB-EZE 4 times a week. Rumors have it the flight will be suspended on May 1st

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos