Thursday, January 3, 2013

PLUNA Replacement Airline - Business Plan Viability Doubted

Doubts regarding the viability of the airline that the former PLUNA employees are proposing have come to light. 

The Uruguayan government believes that the plan's revenue projections are too optimistic and anticipated costs are "detached from reality".  One report estimates total employee compensation costs at an average of US$ 4,000 per employee per month, a small fortune in Uruguay.  

Also, one of the key provisions of the new carrier's business plan is that the Uruguayan government would assume the debt payments on the seven ex-PLUNA CRJ-900's remaining in government hands for two years, a US$ 34.4 million obligation that the government does not want to assume.   

Finally, the employees would need to get the new airline operational within 180 days according to the conditions of the government legislation but there are doubts that all of the necessary preparations, authorizations and formalities can be completed on time, which include forming a "civil non-profit society" and presenting documentation and supporting data to the Civil Aviation & Aeronautical Infrastructure Directorate (DINACIA) and the Ministry of Transport & Public Works (MTOP).  


El Observador Uruguay 28Dec12

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