PAUL LEWIS / WASHINGTON DC
The head of Columbia's recently merged ACES-Avianca airline grouping, Juan Emilio Posada, has listed cost cutting, improved revenue management and finding a global alliance partnership as the most pressing priorities that need to be addressed by the new combined management team over the coming months.
"The immediate challenge is cash flow followed by the need to build a new airline culture," says Posada, who was formerly ACES Columbia president and chief executive. Avianca and ACES, along with its domestic subsidiary SAM Columbia, are all losing money and, even once reforms are in place, Posada does not anticipate the yet-to-be named new group to break even before 2004 (Flight International, 12-18 March).
Columbia's carriers have traditionally suffered from low load factors and there is an urgent need to implement more efficient revenue management techniques. ACES and Avianca combined control 67% of the country's 4.5 million domestic passenger market and around 50% of the 1.5 million international passenger traffic. "We expect to generate $20 million or more just by improving our revenue management," says Posada.
The merger of the two airlines, together with recent contraction in business, will result in a 10-12% cut in the 8,000 strong workforce. With the elimination of duplicated services and better co-ordination of flight schedules, savings of $55-99 million are expected.
The combined fleet will comprise eight Airbus A320s, nine ATR 42s, six Boeing 757-200s, five Boeing 767-200/300ERs, 13 Boeing MD-83s, and nine Fokker 50s. Immediate capacity cuts comprise retiring ACES' three remaining Boeing 727-200s and one 50-seat turboprop - either an ACES ATR 42 or an Avianca Fokker 50.
The new carrier's other immediate goal is to join a global alliance. "We hope to be able to decide by 30 June," says Posada.
Source: Flight International
