JACKSON FLORES / RIO DE JANEIRO
After Avianca's US affiliate enters Chapter 11, alliance cuts capacity, sheds routes and staff
Alianza Summa, the corporate umbrella of Colombian airlines Avianca, ACES Colombia and SAM, is implementing measures aimed at restructuring the three carriers' alliance and improving its financial health after Avianca's US-based affiliate filed for Chapter 11 protection in March.
The group is cutting 30% of its fleet capacity, dropping loss-making routes and shedding staff to achieve a $32.4 million reduction in annual operating costs.
Avianca reached agreement to hand back in May two Boeing 767-300ERs, to Ansett and Pegasus, and two 757s to International Lease Finance and Pegasus. The carrier is expected to hammer out a deal to return its remaining 757s and its two Ansett-leased 767-200/300ERs, as well as three Ansett Boeing MD-83s. ACES Colombia was expected to return three of its Airbus A320-200s at the end of May.
The fleet changes will mean domestic and international route network cuts and frequency reductions on services to a number of Latin American destinations including Aruba, Curação, Mexico City and Santo Domingo. To fit the forecast downsizing of its operations, the three Alianza Summa carriers are expected to make around 2,300 employees redundant.
Increases in insurance premiums, fuel costs, the heavy devaluation of the Colombian peso and US visa restrictions have taken their toll on the year-old alliance's financial performance.
Source: Flight International
