Paul Lewis/MIAMI
Time for grounded national carrier AeroPeru is fast running out. The airline is struggling to enlist the financial backing of a foreign carrier before a government decision this month on granting operating licences to would be start-up successors.
"If we can establish a new strategic partner to invest in the company and capitalise it to a reasonable level then AeroPeru will fly again. If this deadline is reached without a viable business plan, we'll be facing liquidation," explains AeroPeru chief executive Jaan Albrecht.
The carrier recently halted all domestic and international operations and returned all of its leased Boeing 727 and 757 aircraft to Ansett, International Lease Finance and Pegasus, as its financial difficulties deepened.
According to Albrecht, who was appointed by AeroPeru shareholder Cintra in December to rescue the carrier, AeroPeru lost $62 million in 1998 and was $174 million in debt.
"We found the cash situation of the company was so strapped there was no possibility of doing business under the same circumstances," says Albrecht. Debt restructuring and a $20 million write-off on outstanding payments by leasing companies in return for a quick return of aircraft has since cut AeroPeru's liabilities to $85 million.
AeroPeru is negotiating with local banks to convert another $20 million in debt into a 20% equity. Its major challenge, however, is finding international investors to replace Delta Air Lines and Mexico's Cintra Group, which each hold a 35% stake. The two companies have refused to inject any more funds.
Albrecht confirms that discussions are under way with Continental Airlines and "two other smaller US carriers". The former already controls 49% of Panamanian carrier COPA and has been strengthening its presence in South America in the face of mounting competition from American Airlines and United Airlines. Peru has the advantage of an existing open skies agreement with the USA.
AeroPeru says it is looking for start-up capital of between $20 and $25 million and requires a further $10 million cash-in-hand. Planning also calls for nine to 10 Boeing 737s and 767s to restart services, which it wants to lease possibly from a partner carrier.
The carrier was traditionally allocated 70% of all routes, but the only carriers operating in Peru are Aero Continente and the military run TANS. Also waiting in the wings for permission to fly domestically and internationally is LanPeru.
Source: Flight International
