Brazilian domestic airline Transbrasil has admitted it is in the worst financial position in its history. The Sïo Paolo-based company's chief executive says the fleet is now too small to generate the required revenue.
Starting the year with 12 Boeing 737-300/400s and five 767-200/300ERs, the carrier has shrunk to just one 767-200 and five 767-300s, as its inability to meet leasing payments forced it to return aircraft to lessors.
Obliged to surrender international routes and downsize its domestic network, the Brazilian airline has also recently been experiencing difficulties in maintaining aircraft availability owing to spares shortages. This has led to the suspension of flights to key destinations such as Brasília, Porto Alegre and Rio de Janeiro. It now has debts of $373 million.
Efforts to boost cashflow by slashing fares has failed to raise load factors beyond 48% and over the last seven months, the airline has consistently delayed salary payments to its 2,000 employees. The carrier is also being sued by BR Distribuidora, a local aviation fuel supplier over unpaid bills.
Chief executive Celso Cipriani has denied speculation that it is filing for bankruptcy, but concedes that the airline is in the middle of the most difficult period in its 46-year history. "Our current fleet is far too small to generate the required revenue. We would need at least 40 aircraft to even out the ledger," he says.
While one Brazilian airline struggles at home, another has exited from an ill-fated venture abroad. Brewery baron Ernesto Asbun has unexpectedly acquired the 50.3% stake held by VASP in Lloyd Aéreo Boliviano (LAB), Bolivia's leading carrier.
The stake was to change hands on 20 November, when a new board of directors will also be elected. Despite a Bolivian court injunction to freeze the sale of VASP president Wagner Canhedo's shares, the transaction was blessed by the Bolivian Government, which over the last four months has been seeking a solution to bring to a close LAB's crisis.
Burdened by a $57 million debt, all the viable alternatives required the removal of Canhedo's interests in LAB, which date back to 1995 when he acquired a 49% stake.
Claudio Mansilla, Bolivia's foreign trade minister, confirmed earlier this month that US lessors International Lease Finance Corporation and GE Capital Aviation Services, as well as Cologne-based Lufthansa Consulting, were interested in acquiring a stake in LAB.
Source: Flight International
