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- Aerolineas Argentinas
KLM Royal Dutch Airlines
Based in Buenos Aires, Aerolineas Argentinas is the national carrier of Argentina and operates an extensive domestic and regional network within Argentina and South America, as well as international services to Europe, North America, Australia and New Zealand. Aerolineas has announced plans to join the SkyTeam alliance in 2012.
Location of Aerolineas Argentinas main hub (Buenos Aires Aeroparque Jorge Newbery Airport)
451 total articles
15 total articles
Aerolineas Argentinas is focusing on further expansion in the short-haul market, where it continues to benefit from protectionism. The government-owned carrier has committed to purchasing 20 additional 737-800s, growing a narrowbody fleet which has already been renewed since renationalisation in 2008.
The flag carrier has incurred stiff losses since renationalisation despite trying to improve its position through network adjustments, fleet renewal and new partnerships including membership of SkyTeam. Aerolineas continues to work on improving its highly unprofitable long-haul operation but the carrier is now primarily focusing growth in the domestic and – to a lesser extent – the regional international sectors.
Domestically Aerolineas benefits from a lack of competition as Argentina is not open to new entrants including low-cost carriers. Its only main domestic competitor, LAN Argentina, has been unable to expand and has had to overcome numerous challenges, including a recent attempt to evict the carrier from its maintenance base which could have forced it to withdraw from the domestic market.
Aerolineas Argentinas is aiming to turn around its unprofitable long-haul operation by renewing its widebody fleet, adding capacity to several existing destinations and implementing codeshares with its SkyTeam partners. The airline plans to acquire 12 A330-200s over the next four years, allowing it to replace most of its A340s – the only widebody type in its current fleet.
Aerolineas remains unprofitable, an exception in a Latin American industry which has one of the highest profit margins and growth rates in the global industry. Aerolineas and its highly protectionist government owner are often criticised by more successful Latin American airline groups, with a particularly hostile backlash against Argentina taking place at the recent ALTA 2012 Airline Leaders Forum. But Aerolineas has improved its outlook significantly since renationalising and embarking on a restructuring at the end of 2008.
Fixing the long-haul network remains a challenge but the airline’s management team is putting in place the right strategies to give Aerolineas a chance to turn around - and hopefully give the government the confidence to loosen its unhelpfully protective aviation policies.
Aerolineas Argentinas formally joined the SkyTeam Alliance on 29-Aug-2012, completing an important component in the flag carrier’s strategy to reverse several years of unprofitability and lacklustre service standards. SkyTeam will allow Aerolineas to virtually expand its relatively small and highly unprofitable international network as the carrier aims to quickly start codesharing with several current and prospective members. But the alliance alone will not fix Aerolineas’ deep-rooted problems and the government-owned flag carrier still has to overcome several challenges to achieve sustained profitability.
For SkyTeam, Aerolineas Argentinas fills an important white spot in South America, a fast-growing region where the alliance previously lacked any local members. But SkyTeam still badly lags behind oneworld and Star in the increasingly important Latin American market. The alliance is now striving to woo Brazil’s Gol as a new member, which would allow SkyTeam to close the gap with its rivals.
The demise of Pluna has left a large void in the Uruguayan market that will be partially filled through expansion by carriers from neighbouring Argentina, Brazil and Paraguay as well as by tiny Uruguayan regional carrier BQB Air. The Uruguayan Government has opted against bailing out Pluna, which ceased operations on 05-Jul-2012, and is instead now trying to find another carrier (either new or existing) to take over its routes and, potentially, its employees and fleet.
But the end result will almost certainly be the the lack of a network carrier for Uruguay and the sale of Pluna’s 13 Bombardier CRJ900 regional jets to overseas buyers. While some of Pluna routes could be taken over by other carriers, there will almost certainly be a steep reduction in traffic at Montevideo’s Carrasco International Airport as the Uruguayan market is too small to support more than a handful of point-to-point routes.
Aeromexico’s new codeshare agreement with Brazilian carrier TAM represents the second agreement Mexico’s largest carrier has signed with a non-SkyTeam carrier in the last two months. The partnerships reflect the need for both Star and SkyTeam carriers to access key markets in Latin and Central America that are not available through their respective alliance partners.
The Avianca-TACA relationship with Aeromexico, announced in Mar-2012, was surprising given that the Kriete family, which is a main shareholder in Avianca-TACA, is also a major holder in Aeromexico’s competitor Volaris. But Aeromexico has been pursuing a tie-up with Colombia’s largest carrier, Avianca, since it started Mexico City-Bogota flights in 2010. The chance was brushed aside once Avianca-TACA opted to join the Star Alliance, but now the agreement will include more connections than just Bogota as Avianca-TACA cited an ability to partner with Aeromexico on flights to Central and South America during the second half of this year.
Argentina’s aviation market has taken another step backwards as the country’s Government continues to come up with new measures aimed at protecting struggling flag carrier Aerolineas Argentinas. Aerolineas, which has not yet completed the restructuring it started three years ago after the carrier was renationalised, faces another challenging year while Latin America’s other leading carriers prosper without any government subsidies or protection.
In the latest example of protectionism, Argentinean civil aviation authorities last month decided to revoke LAN Argentina’s permits to operate international flights from Buenos Aires’ downtown airport, Aeroparque Jorge Newbery. LAN is vehemently protesting the decision on the grounds the Chile-based airline group, which has had an affiliate in Argentina since 2005, is being unfairly discriminated against. LAN currently operates two important international business routes from Aeroparque, Santiago and Sao Paulo Guarulhos.
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