MARIO FONSECA / RIO DE JANEIRO
The rapid slowdown in global air transport following 11 September is set to increase rationalisation in an already depressed Latin American airline industry, with a number of ailing carriers not expected to survive this latest crisis.
Economic downturn and erosion of local currencies against the US dollar had already badly hit the region's airlines prior to the attacks on New York and Washington DC. Among the airlines on the endangered list are Aerolineas Argentinas, which is being bought by the Spanish Air Comet consortium and weighed down by labour difficulties, along with Avianca of Colombia, Transbrasil and VASP.
"Aerolineas was already struggling domestically, and the only people flying were those government officials heading for talks with the International Monetary Fund," says Stan Dejak, Aberdeen Asset Management analyst. "The Cintra-owned airlines [AeroMexico and Mexicana] are also in terrible shape in Mexico, and with their high amount of US-related business, I think they're now even more vulnerable," he adds.
Varig was among the first carriers to announce staff and fleet cuts, with plans initially to lay off 1,750 employees. The airline will return one of its leased Boeing 737-300s and retire 12 older -200s by December. Three of the 737s were grounded in August and another was written-off while landing at Goiania Airport in mid-September. The Brazilian flag carrier will also ground three 767-300s and three -200s, representing around 20% of its fleet. Varig is continuing to take delivery of newer aircraft for the time being, however, its first 737-800 arrived in late September, and its initial 777-200 is due for delivery this month.
Varig's US routes to Los Angeles, Miami and New York - which generate 55% of the carrier's international revenues - have suffered a 35% load-factor dip, with Varig warning that more staff cuts are likely if load factors drop further.
Varig's rival TAM has experienced a 15% drop in passenger load factor on its US routes, resulting in the suspension of one of its daily flights between Miami and Sïo Paulo, though aircraft deliveries should continue as scheduled with TAM due to receive five Airbus A320s by the end of the year.
Brazilian airports have registered a 17% fall in international passenger traffic since the attacks on the USA. Even the region's strongest carrier, LanChile, is not immune, with its stock value plummeting 30% since 11 September. LanChile relies on the US market for up to 40% of its revenue. Sharply diminished traffic has meant trimming daily non-stop services to Buenos Aires, Miami and New York by nine flights in total.
Having already laid off more than 70 pilots, or around 20% of its aircrew, due to a continuing labour dispute, LanChile now plans to dismiss a further 650 employees.
Source: Flight International
