Friday, March 16, 2018

FLEET UPDATE: LATAM Argentina receives 16th A320, 19th aircraft overall

LATAM Argentina's 16th A320, LV-HQI (c/n 3319), landed at Buenos Aires Ezeiza (EZE) on 11Mar18, joining the airline's fleet after flying from Mexico City (MEX) (via Lima (LIM)) where it had been painted in LATAM colors. 

LV-HQI was originally delivered to LAN Airlines as CC-CQN in 2007 and went on to fly in Colombia before rejoining LAN (later LATAM Chile) in 2011.  LATAM Argentina has had a fairly stable fleet of 15 A320's in recent years so it is possible that the arrival of LV-HQI will not result in an addition to the carrier's fleet but will instead replace one of the airline's other A320's, either temporarily while the aircraft is undergoing maintenance or permanently.  The possibility of the latter is reinforced by LATAM Argentina's recently announced plans to drop all service to Bahia Blanca (BHI) and San Juan (UAQ) on 01Jun18.

In addition to its A320 fleet, LATAM Argentina has three 767-300's that it operates on the Buenos Aires Ezeiza (EZE) - Miami (MIA) route 10x/weekly.    


Tuesday, March 13, 2018

ROUTE UPDATES: Aerolineas Argentinas Seasonal Summer Service

* Seasonal Summer Service 

Aerolineas Argentinas / Austral were reported by various news outlets to be planning the following routes during the southern hemisphere summer months and presumably operated them though planned service occasionally does not materialize as announced:

Cordoba (COR) - Mar del Plata (MDQ) - eff 10Dec17 - seasonal summer service

Flights were scheduled to be operated by Austral E190's 3x/weekly which transitioned to 7x/weekly when the peak summer arrived, presumably in January.

Cordoba (COR) - Punta del Este (PDP) - eff 25Dec17 - seasonal summer service

Flights were scheduled to be operated by Austral E190's and Aerolineas Argentinas 737 series aircraft 4x/weekly. 

Cordoba (COR) - Florianopolis (PDP) - eff 01Jan18 - seasonal summer service

Flights were planned to be operated by Austral E190's 3x/weekly.

* General Information on Seasonal Summer Service without detailed start dates, aircraft types etc.:    

Jujuy (JUJ) - Sao Paulo - January & February - 1x/weekly

Service was presumably to Sao Paulo Guarulhos (GRU) with type of aircraft not announced.  These were charter flights contracted by the package tour operator Badino.  This service was significant in that it was to connect northwest Argentina directly with Brazil for inbound and outbound tourism without connecting through Buenos Aires Aeroparque (AEP) or Cordoba (COR).         

* Bahia Blanca (BHI) - Bariloche (BRC) - 4x/weekly

Was probably operated with Austral E190's as they are the aircraft type most commonly used in domestic routes connecting "interior" points directly to each other. 

* Mar del Plata (MDQ) summer service

Buenos Aires (presumably Aeroparque (AEP)) increase to 30 weekly flights.

Flights from Cordoba (COR), Mendoza (MDZ), Rosario (ROS), and Tucuman (TUC) were due to start in December presumably operated mostly by Austral E190's as in the past.

* Brazil summer service

Flights to Florianopolis (FLN) from Buenos Aires (Aeroparque and/or Ezeiza?), Cordoba (COR), Mendoza (MDZ), and Rosario (ROS).  

Flights to Rio de Janeiro Galeao (GIG) from Cordoba (COR) and Rosario (ROS).  

* Uruguay summer service

Flights to Punta del Este (PDP) from Cordoba (COR) and Rosario (ROS).

Flights to Punta del Este (PDP) from Buenos Aires (mostly or exclusively from Aeroparque) increasing from the typical 1x/daily offseason service to 32x/weekly in the peak January / February summer season.


Friday, March 9, 2018

Aerolineas Argentinas to make decision on replacement of A330 long-range fleet by end of 2018

Aerolineas Argentinas A330-200, LV-FVH (c/n 1605), Aerolineas' first factory-delivered and owned aircraft taxiing at a European airport.  (Phil Perry Collection)

Aerolineas Argentinas will reportedly make a decision on the replacement of its intercontinental jet fleet by the end of 2018.

Aerolineas Argentinas - Intercontinental Flights - First Decades

Aerolineas Argentinas has flown several types of long-range jet aircraft from  Argentina to Europe and North America since it first introduced the de Havilland Comet 4 into service in 1959.  Since then the Boeing 707, 747-200, 747SP, 747-400 and Airbus A310 have all flown long-range services for Aerolineas with even some smaller regional types, such as the 727-200 being pressed into service occasionally on multi-stop runs from Argentina to Miami, for example.

After the 747-400 was retired from active Aerolineas service on 01Feb12, the airline remained with an exclusive Airbus fleet for its intercontinental scheduled flights.  Aerolineas has operated a total of 13 different A340 series aircraft, including three A340-200's and ten A340-300's, two of which remain in service plus 10 A330-200's, all of which are currently flying for the carrier.

Airbus A340-300

The two remaining A340-300's, LV-FPU (c/n 170) and LV-FPV (c/n 193), the latter painted in Skyteam colors, will soldier on until 2019 or even 2020, presumably flying mostly the Buenos Aires Ezeiza (EZE) - Madrid (MAD) route as they do now.

Airbus A330-200

Aerolineas Argentinas started taking delivery of the backbone of its current intercontinental fleet, the A330-200, in 2013 with three examples joining the fleet that year, one in 2014, two in 2015, three in 2016 and the final A330-200 being acquired in early 2017 for a total of 10 of the type.     

Two of these aircraft, LV-FNI (c/n 290) and LV-FNJ (c/n 300), were delivered to SABENA with both going on to also fly for VG Airlines and Malaysia Airlines before joining Aerolineas. 

Another two A330-200's, LV-FNK (c/n 358) and LV-FNL (c/n 364), were delivered to Air Afrique and proceeded to serve an identical sequence of operators; Calliope, Eurofly, Atlas Jet, Saudi Arabian, and Atlas Jet again before going on to Aerolineas.

Yet another pair of A330-200's had identical service histories before joining Aerolineas, LV-GKO (c/n 587) and LV-GKP (c/n 634), which were delivered to EVA Airways prior to going to Argentina.

Finally, Aerolineas Argentinas bought four factory-new A330-200's directly from Airbus in February 2013, with the first example, LV-FVH (c/n 1605), being delivered on 28Feb15 followed by LV-FVI (c/n 1623) on 30Apr15, LV-GHQ (c/n 1737) on 05Aug16 and LV-GIF (c/n 1748) on 02Nov16.

Aerolineas deploys its A330-200 fleet on its intercontinental network radiating out from Buenos Aires Ezeiza (EZE) to Miami (MIA), New York Kennedy (JFK), Cancun (CUN), Punta Cana (PUJ), Rome-Fiumicino (FCO), and Madrid (MAD) 2x/weekly with the other 5 days being operated by A340-300's.  The carrier  flew to Barcelona (BCN) until recently too.   

Recent European Route Changes

Aerolineas dropped Barcelona (BCN) because it was unprofitable, especially in the face of competition from Level, an LCC belonging to the IAG Group, but it plans to restart service to the Catalan city when it has more efficient lower-cost aircraft in its fleet that will make the airline more competitive on the route.  

The Rome-Fiumicino (FCO) route was also a money-loser but it apparently became a much more attractive product when Aerolineas added frequencies to make it a daily service because the route is now profitable. 
A330-200 Replacement

Aerolineas will reportedly start retiring its A330-200's after it has completed replacing Austral's E190 fleet, probably in 2021 or soon thereafter.  

The leading candidate aircraft include the 777, 787, and A350 with no further indication thus far of which models of each type might be under consideration. 

Wednesday, March 7, 2018

HISTORICAL PHOTO: Aerolineas Argentinas Comet 4, LV-AHN, at Buenos Aires Ezeiza (EZE)

Aerolineas Argentinas de Havilland Comet 4, LV-AHN (c/n 06408), at Buenos Aires Ezeiza (EZE), probably in the 1960's.  (Phil Perry Collection)

This aircraft was the first of seven Comet 4's that Aerolineas Argentinas flew with this example joining the fleet on 02Mar59, only a few months after the type entered service with BOAC on 04Oct58 between London Heathrow (LHR) and New York Idlewild (IDL), today's JFK.  

LV-AHN was hijacked on 24Mar70 when flying between Cordoba (COR) and Tucuman (TUC).  It was first diverted to Santiago (SCL) where it was refuelled and some passengers released before proceeding to Lima (LIM) and finally Havana (HAV).  Curiously, the aircraft was the first to join the Aerolineas fleet and last to leave it when it was retired in December 1971 with 30,000 hours on the airframe.   

The aircraft went on to Dan Air London as a source of spares before being broken up at Lasham, England in March 1973.


Monday, March 5, 2018

ROUTE UPDATE: Flybondi added flights from El Palomar (EPA) to Bariloche (BRC), Neuquen (NQN) & Tucuman (TUC) with more new destinations soon

Flybondi started the following new routes this past week, almost exactly as previously announced with only the Bariloche (BRC) flight starting one day later than planned:

* Buenos Aires El Palomar (EPA) - Neuquen (NQN) - eff 26Feb
* Buenos Aires El Palomar (EPA) - Bariloche (BRC) - eff 27Feb
* Buenos Aires El Palomar (EPA) - Tucuman (TUC) - eff 28Feb

In addition, the airline plans to start three new routes in March, all out of Buenos Aires El Palomar (EPA), perhaps signalling that this will be its most important airport in the long run despite its strong presence in Cordoba (COR).

* Buenos Aires El Palomar (EPA) - Corrientes (CNQ) - eff 05Mar (delayed to 28Mar)
* Buenos Aires El Palomar (EPA) - Mendoza (MDZ) - eff 05Mar
* Buenos Aires El Palomar (EPA) - Jujuy (JUJ) - eff 13Mar (delayed to 28Mar)

The recent arrival of Flybondi's third 737-800 should make the operation of the new routes more viable. 

Editor's Comments:

When airlines start new routes, most of them like to get established in those markets and then build up frequencies before adding new routes to their systems.  Flybondi appears to be taking the opposite approach, adding as many new destinations as possible as quickly as possible, even if they only operate certain routes once daily or a few times per week.  

This might be due to many routes not being able to support many frequencies but maybe Flybondi is looking to get established in as many cities in Argentina as possible before Norwegian Air Argentina, the local affiliate of Norwegian, one of the world's most important Low Cost Carriers starts up in the coming months. 


Sunday, March 4, 2018

FLEET UPDATE: Flybondi received its 3rd 737-800, LV-HKR, on 03Mar18 at Cordoba (COR)

Flybondi's third 737-800, LV-HKR (c/n 32614/1201), arrived at Cordoba (COR) on 03Mar18 after a long delivery flight from Singapore via the Maldives, Angola and Brazil with the stop in the Maldives being for several days due to mechanical issues that had to be resolved.

The aircraft is expected to enter service with Flybondi within the next few days and none too soon as the airline has experienced chronically delayed flights since its startup a month ago, with flights arriving up to eight hours late not being uncommon.  Additionally, Flybondi recently started service from one of its two main bases, Buenos Aires El Palomar (EPA) (the other being Cordoba (COR)), to Bariloche (BRC), Neuquen (NQN) and Tucuman (TUC) with Corrientes (CNQ) and Jujuy (JUJ) to join its network in the coming days so it needs all the "lift" that it can muster.


Friday, March 2, 2018

Flybondi's first month of service plagued with operational problems

Flybondi, Argentina's first Low-Cost Carrier (LCC), started regularly scheduled service on 26Jan18 between Cordoba (COR) and Iguazu (IGR) adding several more routes since then, including:

* Cordoba (COR) to Bariloche (BRC), Buenos Aires El Palomar (EPA) and Mendoza (MDZ) 

* Mendoza (MDZ) to Bariloche (BRC) and Iguazu (IGR)

* Buenos Aires El Palomar (EPA) to Bariloche (BRC), Neuquen (NQN) and Tucuman (TUC).

For most of the first month, the airline attempted to operate their route system with only one aircraft, 737-800 LV-HKS (c/n 33821/1698), which unsurprisingly resulted in ongoing reliability issues:

* Demonstration Flight Interrupted 

On 23Jan18, three days before the start of service, a demonstration flight from Cordoba (COR) for the press and others had to turn around after only 12 minutes in the air apparently due to a warning indication related to one of its engines.  With many established interests being opposed to the threat posed by LCC service in Argentina, this presumably small incident received a lot of negative press coverage in the Argentine media.

* Baggage shipped to Destination by Truck  

A Bariloche (BRC) to Cordoba (COR) flight on 03Feb18 had to operate under weight restrictions resulting in all the passenger luggage being surfaced by truck to Cordoba (COR).  Normally, a 737-800 can easily take on a full load of passengers and baggage plus enough fuel to fly the distance from Bariloche (BRC) to Cordoba (COR) with enough reserves for circling over the destination airport for 45 minutes and diversion to an alternate airport.  

However, Bariloche (BRC) is located somewhat high above sea level at 2,936 feet (895 meters) plus it was a hot day, which, according to Flybondi, lowered the aircraft's maximum allowable takeoff weight for the length of Bariloche's runway (the higher the elevation and the higher the temperature, the thinner the air, so aircraft have to be lighter to take off within a given space).    

Additionally, it seems that the aircraft's systems were not qualified for operations over 29,000 ft., which meant flying at a lower altitude where the air is more dense creating more drag and burning more fuel.  This meant that the airline had to load considerably more fuel than usual to reach Cordoba (COR), which in turn did not allow for carrying all the weight of a full load of passengers and their baggage.  Given this situation the airline had to choose what to leave behind in Bariloche (BRC) and elected to leave the passenger baggage, which it trucked to Cordoba. 

This was the explanation given by the airline along with information from other sources.   

* Cordoba (COR) to Buenos Aires El Palomar (EPA) Inaugural Flight Marred

The airline's inaugural flight from Cordoba (COR) to Buenos Aires El Palomar (EPA) on 09Feb18 was diverted to Buenos Aires Ezeiza (EZE) due to bad weather creating conditions below operating minimums at EPA, which does not have the same sophistication of landing aids and other equipment as EZE.  The aircraft then ferried empty to EPA where it finally departed on the inaugural flight to Cordoba (COR).  The airline responded properly to the situation but still, what would have been a shining moment for the carrier turned into one that was more disappointment than celebration.        

* Bad Wheel on Sole 737-800 required Chartering in Aircraft from Andes Lineas Aereas  

A problem with one of the wheels on the only plane in Flybondi's fleet at the time rendered the plane inoperable requiring the airline to charter in aircraft from Andes to cover six flights on 15Feb18 and two more the following day, inconveniencing in excess of 625 passengers.   

* Worst Problem - Most Flights Late with Many Cancelled

Despite the highly-publicized events mentioned above, Flybondi's biggest problem in its first month of service has been a large number of late flights, with delays of 2-3 hours being common and some extending up to 8 hours with a fair number of flights being cancelled altogether. 

* Better Days Likely Ahead 

Flybondi took delivery of its second 737-800, LV-HFR (c/n 28071/133), on 14Feb18 with its third aircraft due imminently, which should help the airline cover its routes more reliably.  

Up until 27Feb18, Flybondi had completed 139 flights of which 109 originated/terminated in Cordoba (COR).  The airline plans to operate 33 routes and 10 aircraft by the end of this year.  Indeed, just this past week Flybondi added Buenos Aires El Palomar (EPA) to Bariloche (BRC), Neuquen (NQN), and Tucuman (TUC).     

Flybondi claims to be selling 20,000 tickets per week, which would fill 16-18 737-800 per day, but they presently do not fly close to that many flights !  They will need the half-dozen or so additional aircraft due to join its fleet this year sooner rather than later !       


Thursday, March 1, 2018

FLEET UPDATE: Aerolineas Argentinas received its 4th 737 MAX 8 on 25Feb18

Aerolineas Argentinas' fourth 737 MAX 8, LV-HKV (c/n 44294/6807), arrived at Buenos Aires Ezeiza (EZE) on 25Feb18 on its delivery flight from Boeing Field (BFI) via Punta Cana (PUJ).

Aerolineas is due to receive only one more 737 MAX 8 in 2018 for a total of five of the model with apparently no more on order by the carrier.   


Reader Matias Muse pointed out that Aerolineas Argentinas actually has six more MAX series aircraft on order, for a total of 11, with the option of choosing which model for the remaining six to be delivered, MAX 7, MAX 8, MAX 200, MAX 9 or MAX 10, as noted by the leading British aviation publication, Flight International:

Wednesday, February 28, 2018

FLEET UPDATE: Aerolineas Argentinas retired A340's LV-CSE and LV-CSD in late 2017

Aerolineas Argentinas A340-313X, LV-CSD (c/n 123), pictured above was retired by the airline in November 2017.  (Phil Perry Collection)

Aerolineas also retired another A340-313X, LV-CSE (c/n 126), when it departed Buenos Aires Ezeiza (EZE) to Victorville (VCV), California, USA on 05Nov17 where it was destined to be scrapped for spare parts.   

This leaves Aerolineas Argentinas with three A340-313X's in its fleet, LV-CSF (c/n 128)LV-FPU (c/n 170), and LV-FPV (c/n 193) with LV-FPU flying the Buenos Aires Ezeiza (EZE) - Madrid (MAD) route on a regular basis lately, LV-FPV flying both the Madrid (MAD and Ushuaia (USH) routes and LV-CSF apparently inactive (all route data per

LV-FPU and LV-FPV are scheduled to leave the Aerolineas Argentinas fleet in late 2018 or early 2019 marking the retirement of the A340 from service with the Argentine national carrier.   


Tuesday, February 27, 2018

FLEET UPDATE: Aerolineas Argentinas retired 737-700 LV-CYO in late 2017

Aerolineas Argentinas 737-7Q8, LV-CYO (c/n 30633/1220), taxis at Buenos Aires Aeroparque (AEP) on 07Aug16.  (Phil Perry Photo)

The above aircraft left the Aerolineas Argentinas fleet on 01Nov16 when it departed Buenos Aires Ezeiza (EZE) for Paine Field (PAE) in Everett, Washington USA for eventual delivery to Southwest Airlines as N7867A (the aircraft has yet to enter service with the carrier as of this writing).  Every former Aerolineas 737-700 has gone on to join Southwest.


Saturday, February 24, 2018

FLEET UPDATE: Aerolineas Argentinas started process of replacing entire Austral E190 fleet

Austral E190, LV-GIQ (c/n 716), taxis at Buenos Aires Aeroparque (AEP) on 08Feb18.  Austral took delivery of LV-GIQ less than two years ago on 29Jul16, the 26th and last of example of the E190 to join the airline.  It was fresh from the factory on lease from Nordic Aviation Capital.  This aircraft and its 25 E190 stablemates will apparently start exiting the Austral fleet in the next year or so.    

Aerolineas Argentinas has formally started the process of replacing the entire E190 fleet of subsidiary Austral Lineas Aereas.  

Airbus, Boeing, Bombardier and Embraer invited to bid

The airline has solicited proposals from the world's four most important commercial aircraft manufacturers, Airbus, Boeing, Bombardier and Embraer, for replacement of Austral's entire fleet of 26 E190's on a one-for-one basis.  Aerolineas' president Mario Dell' Acqua at first indicated that the carrier would seek 170-180 seat replacements, suggesting a large increase in capacity considering that they would be replacing the 96-seat E190's.  This would have also ruled out Bombardier and Embraer from the competition due to their lack of such large aircraft with no plans to build any in the foreseeable future either.  

However, Mr. Dell' Acqua has also mentioned more recently the possibility of replacements having 130 seats, suggesting that there might be a mixed fleet of smaller and larger aircraft, presumably to serve smaller markets that are not large enough to support service by 180-seat aircraft, such as the Argentine cities of Rio Cuarto, Santa Rosa and Viedma.  He also recognized that many of these smaller markets have airports that the 737-800 cannot operate into.  
This might open the door a bit for Bombardier and Embraer but this would still favor Airbus and Boeing because they could offer both 130 and 180 seaters from their A320 and 737 families, respectively.

Austral's 24 owned E190's as Partial Payment for Replacement Aircraft

One of the conditions of the Request for Proposals (RFP) that Aerolineas has made is that the winning bid for a replacement aircraft must include acceptance of Austral's 24-owned E190's (the other two are leased) as partial payment for the new airframes.  Aerolineas tried to sell the 24-owned planes as one lot but found no takers and discovered in the process that the market for used E190's is very weak with the Austral examples being seven years old on average and having an appraised value of US$ 12 million each, way below the purchase price of US$ 34.9 million per example (which was reportedly inflated, more on that below).  Further deteriorating the value of Austral's E190's is their impending need for major maintenance almost simultaneously with one another, having been delivered in a short time frame starting in 2010. 

It's all about the Costs per Seat

The main reason behind the decision to replace the E190 fleet is the low operating costs in terms of Cost per Available Seat Mile (CASM) of larger aircraft such as the 737-800, of which Aerolineas already has has 31, and especially of the new 737 MAX 8, which Aerolineas has three of so far with more on order.  

The cost difference can be seen when comparing fuel consumption of the E190 to its potential replacements.      

Wikipedia reports the following fuel consumption data on the listed aircraft on typical 550-600 mile sectors without specific mention of wind / weather conditions or operating weights, but presumably with loads taking advantage of each aircraft's capabilities:

The E190 typically consumes 2.98 kg/km (10.6 lb/mile), which with 96 seats = 3.81 liters/100km/seat

The planned E190 replacement, the E190-E2 with geared turbofan engines and many other improvements, burns 2.83 kg/km (10.04 lb/mile), which with its 106 seats = 3.32 liters/100km/seat, a 12.9% improvement compared to the E190.  

Similarly, the 737-800 consumes 3.59 kg/km (12.7 lb/mile), which divided by its 162 seats = 2.77 liters/100km/seat, 27.3% less than the E190.

Finally, the new 737 MAX 8 uses 3.04 kg/km (10.8 lb/mile), which with 166 seats = 2.28 liters/100km/seat, a whopping 40.2% less than the E190.

Most other costs, such as ground handing and flight crew expenses are about the same for all of the above aircraft.      

Flight Frequency not a Priority in Argentina

Of course, if the only consideration for airlines was the operating cost per seat, then they would all fly the A380 !  The aircraft that they fly to each city need to be the appropriate size for the number of passengers that the local market can generate plus even large markets do not want to be served exclusively by large aircraft even though they can support them.  Larger aircraft = fewer flights while smaller aircraft allow for more frequent flights, which is important in city pairs with a lot of business traffic. 

For example, New York to Boston, Chicago, London, Los Angeles, San Francisco and Washington are all markets where business travelers demand frequent flights so that they can fly when it is convenient for them.  Other examples include Los Angeles - San Francisco, Dallas - Houston, Toronto - Montreal, London - Paris, Tokyo - Osaka, Beijing - Shanghai, and Sydney - Melbourne.

New York - Boston is served primarily by shuttle flights operated by Delta 717's and American E-190's, both with approx. 100 seats.

However, Argentina is different in that the only frequency-sensitive market is between the nation's two largest cities, Buenos Aires - Cordoba, with approx. 10-12 daily flights between Buenos Aires Aeroparque (AEP) and Cordoba (COR) supplemented by a few flights from Buenos Aires Ezeiza (EZE) and now Buenos Aires El Palomar (EPA) to Cordoba too.  With frequency being relatively unimportant, larger aircraft with lower CASM's become more attractive for Aerolineas Argentinas / Austral, especially with the incipient competition from Flybondi and Norwegian Air Argentina, both of which are using or plan to use the 737-800 and/or the 737 MAX 8 with low CASM's, allowing them to offer low fares true to their mission as Argentina's first LCC's.       

New Aircraft Timings     

At one time it was suggested that Aerolineas might take Austral's E190's out of service at an accelerated rate but it has been suggested more recently that the pace would probably be 4-5 aircraft per year divided in two stages of 12 aircraft followed by the remaining 14 airframes.  

The speed of delivery of the new planes will likely be determined at least partly by the chosen manufacturer's ability to deliver new aircraft given its commitments to other airlines and the rate at which Aerolineas' can train new pilots to fly them. 

E190 Disposal = Large Cash & Accounting Losses     

Aerolineas hesitated over the last few months on its decision to retire Austral's E190 fleet because of the likely heavy financial losses such a move would incur. 

The remaining debt on the aircraft will likely exceed the value that the airline group will be credited towards the purchase / lease of new aircraft plus the E190's have apparently been depreciated much more slowly in Aerolineas' accounting books than the rate at which the aircraft have lost market value,
which will result in an accounting loss as well as the actual cash loss. 

Stating the situation in actual numbers, Aerolineas purchased Austral's initial batch of 22 E190's for US$ 34.9 million each (approx. US$ 4.9 million more than E190's were typically being sold for at that time but that would be the subject of another posting !).

22 aircraft x US$ 34.9 million = US$ 768 million paid for with a 15% deposit with the remaining 85%, US$ 653 million, financed by the Bndes Brazilian government development bank at an interest rate of 7.45%.  Until recently, Aerolineas still owed US$ 360 million of that loan.  With the market value of Austral's E190's currently estimated at US$ 12 million each x 22 aircraft = US$ 264 million, the carrier would have been US$ 96 million short of paying off the debt with the proceeds from the sale of the planes.               

Aerolineas tried to renegotiate the terms of the debt with the Bndes to no avail, choosing instead to take a commercial loan at 4% to retire the debt, thereby saving considerable interest expense in the process.  While the loss is reduced it is still considerable.

Aerolineas stands to also take a large accounting loss from the sale of Austral's E190's because they have been depreciated at a rate slower then their decline in market value.  They are said to each have a value of US$ 24 million on the company's books, which while being worth US$ 12 million as mentioned above would mean a staggering 22 x US$ 12 million = US$ 264 million extraordinary accounting loss, just as the airline has successfully reduced losses from approx. US$ 1 thousand million (billion) earlier in this decade to an expected US$ 90 million in 2018.  

The political cost to the administration of Argentine president Mauricio Macri of such a large financial step backwards by the state-owned carrier could be considerable.          

Sunday, February 18, 2018

FLEET UPDATE: Andes received its 4th 737-800 on 28Jan18

Andes Lineas Aereas' fourth 737-800, LV-HLK (c/n 30883/783), arrived at Buenos Aires Ezeiza (EZE) on 28Jan18 after its delivery flight from Shannon (SNN) via Sal, Cape Verde (SID) and Natal (NAT).

Andes is expected to take delivery of at least two more 737-800's with this type expected to eventually replace the carrier's MD-80 fleet.  Nonetheless, Andes reportedly might add another MD-80 to its fleet in the short term.   

Per and other sources, LV-HLK had not entered service as of this writing.