Monday, August 21, 2017

Aerolineas Argentinas to reduce or dispose of Austral's E190 fleet ? - Part 2 - Bad Idea ?

Blog Editor's Opinion

The answer to the question posed in the title of this posting largely depends on the mission of Aerolineas Argentinas / Austral.    

National Connectivity

As the state-owned national flag carrier of Argentina, Aerolineas Argentinas / Austral's main mission is presumably to contribute to the well-being of the national economy in the most effective way possible. 

As an airline, this would be accomplished by facilitating the movement of people and goods; whether they be business people traveling to close business deals, tourists traveling to enjoy a vacation or individuals visiting friends and relatives; all of these activities generate economic activity and create employment.


Aerolineas Argentinas / Austral could be run like a commercial enterprise to generate a return on investment for shareholders that provide its operating capital.  This would mean operating in a way that would not always be in the greater national interest as the connectivity described in the above paragraph would not be profitable in the case of smaller cities with light passenger traffic volumes that would not allow for sufficient economies of scale to achieve profitable operations at market-level airfares.  

Blog Editor's Perspective

It is the view of this blog's editor that a state-owned carrier should not operate with the primary objective of being a profit-making entity, although if it makes profits while providing a beneficial level of national connectivity, all the better !
With this in mind, the editor suspects that many routes currently operated with Australs' 96-seat E190's would be heavy loss makers if operated with 737-800's as has been proposed.  The choice would then be for the carrier to absorb these losses or abandon these routes with the consequential loss of connectivity and damage to local economies.   

Austral E190 Route Analysis

The editor analyzed Austral's route system based on a snapshot of the carrier's flights on Friday, 04Aug17 to identify sectors flown exclusively by its E190's with no service by Aerolineas 737-800's, which would suggest that these routes are too "thin" (lightly traveled) to justify the operation of the larger aircraft. 

The results can be divided into routes based on five criteria:

* Buenos Aires Aeroparque (AEP) to 7 domestic and 3 international points

The following smaller Argentine cities had service on 04Aug17 from Aeroparque exclusively with E190's, typically on a 2x/daily roundtrip basis:

AEP - Corrientes (CNQ)      
AEP - Formosa (FMA)            
AEP - Rio Cuarto (RCU) 
AEP - San Luis (LUQ) 
AEP - San Rafael (AFA)  
AEP - Santa Rosa (RSA)
AEP - Santiago del Estero (SDE) 

The following international routes from Aeroparque are apparently not able to support operations by larger aircraft profitably and are served only with E190's: 

AEP - Asuncion (ASU)
AEP - Curitiba (CWB)
AEP - Punta del Este (PDP) at least in the low season (non-summer) 

Buenos Aires Ezeiza (EZE) to 4 domestic and 2 international points

These routes from Ezeiza are presumably for feed to/from international flights with special emphasis on longer-range South American regional routes and intercontinental routes to Italy, Spain, and the United States.


EZE - Cordoba (COR)
EZE - Iguazu
EZE - Mendoza (MDZ)
EZE - Rosario (ROS)


EZE - Asuncion (ASU)
EZE - Montevideo

* Cordoba (COR) Hub-and-Spoke System

8 out of 10 flights departing from the Cordoba (COR) hub on 04Aug17 were operated with E190's, which is not surprising since connecting different points of the Argentine "Interior" without going through Buenos Aires is probably not a high-volume proposition.  

The following cities were served by Austral's E190's: 

COR - Bariloche (BRC)
COR - Neuquen (NQN)
COR - Comodoro Rivadavia (CRD)
COR - Mendoza (MDZ) - 2x/daily
COR - Jujuy (JUJ)
COR - Resistencia (RES)
COR - Rio Hondo (RHD) - temporarily replacing Tucuman (TUC) which is currently closed undergoing upgrades

Only two cities were served by Aerolineas 737-800's - Salta (SLA) and Ushuaia (USH) - with the latter not necessarily being a higher traffic destination as it is in the extreme south of Tierra del Fuego and probably beyond the range of the E190 from Cordoba (COR) with a full payload so the 737-800 is the only type that can be deployed on the route.  

* "Corredor" Routes connecting Argentine "Interior" Cities directly with each other

Aerolineas Argentinas / Austral's operates four 
"Corredor" routes with each one flown in a linear or circuitous path stopping in several cities and generally also flying the same route in reverse, without ever connecting via Buenos Aires, saving passengers a lot of time.  

The "Corredor Federal - Norte" and the "Corredor Federal - Sur" are both used to connect points of touristic interest directly to each other in northern and southern Argentina. 

The "Corredor Atlantico" runs from Buenos Aires Ezeiza (EZE) south along Argentina's Atlantic seaboard to Mar del Plata (MDQ) - Bahia Blanca (BHI) - Trelew (REL) - Comodoro Rivadavia (CRD) with the last stop being Rio Gallegos (RGL) or Ushuaia (USH).

The "Corredor Petrolero" connects points important to Argentina's oil industry; Rosario (ROS) - Cordoba (COR) - Mendoza (MDZ) - Neuquen (NQN) - Comodoro Rivadavia (CRD) - Rio Gallegos (RGL). 

The "Correder Atlantico" is operated by Austral E190's and the "Corredor Petrolero" appears to be also.  The other two might also be operated with this aircraft type.  With the amount of traffic flying between these smaller cities being somewhat limited, it would appear to make sense that they would be connected with a smaller aircraft like the E190 instead of the larger 737-800.   

* Lightly-Traveled Individual Route Segments

There are many route segments that do not fall into the above categories that are operated by Austral E190's, such as:

Rosario (ROS) - Mendoza (MDZ) - 4x/weekly connecting Argentina's third and fourth largest cities, respectively.    

Other point-to-point flights that allow passengers to avoid connecting through Buenos Aires that appear to have too little traffic to support 737-800 service include:

Rosario (ROS) - Salta (SLA)
Rosario (ROS) - Bariloche (BRC)
Bariloche (BRC) - Bahia Blanca (BHI)
Bariloche (BRC) - Viedma (VDM)  

* Airports not equipped to handle 737-800 Operations

In addition to light traffic levels, some airports currently served with Austral
E190's are not equipped to handle 737-800 class aircraft in terms of runway length, maximum allowable aircraft weight, and other flight operations criteria.

For example, the blog Aeropuerto Formosa (unofficial) notes that Formosa's Aeropuerto El Pucu's 1800m (5900 ft) runway is not long enough for the 737-800 and it cannot support the weight of such an aircraft either. 

* Conclusion

If Aerolineas Argentinas disposes of Austral's E190's and replaces them with larger aircraft, many routes connecting smaller cities with flights to Buenos Aires Aeroparque (AEP) and through the airline group's hub in Cordoba (COR) will likely become economically unviable.


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