Friday, January 20, 2017

Alas Uruguay - Suspended Operations on October 25, Attempts at Sale Failed, AOC Revoked

After many months of losses, Alas Uruguay suspended operations on Monday, October 25, 2016. The airline had exhausted its US$ 15 million line of credit from the Uruguayan government FONDES development fund, accumulated US$ 4.9 million in unpaid bills with suppliers, and owed considerable backwages to employees.  

Alas' employees generally thought that the solution was for outside investors to inject capital into the company or for it to be taken over by another carrier with the main attraction being Alas' traffic rights on the lucrative Montevideo (MVD) - Buenos Aires Aeroparque (AEP) "Air Bridge". While some employees thought that the company's best bet for a rescue was to keep operating while negotiating with prospective interested parties, at least to maintain the appearance of a viable operation, most believed that Alas should suspend operations to stem the heavy losses that were accumulating with no end in sight.

Alas took delivery of three 737-300's during its formative stages in 2015 with one, 737-33R, CX-OAB (c/n 28869/2887), being returned to the lessor Aergo Group on 25Aug16 and continuing on to the new Chilean airline, Latin American Wings.  Another aircraft 737-36N, CX-OAA (c/n 28569 / 2996) was returned to Aergo Group on 27Oct16, only two days after Alas ceased operations, and it also went on to Latin American Wings.  Its third 737-36N, CX-OAC (c/n 28563/2921) flew to Tucson (TUS) Arizona, USA on 04Nov16. 

Alas Uruguay's management negotiated with several parties in the months prior and after it ceased operating, including Amaszonas (Bolivia), Boliviana de Aviacion, Latin American Wings and Azul Linhas Aereas of Brazil, with some of them willing to take on at least some of Alas' debts and financial responsibilities but the carrier's heavy financial burdens proved too much to overcome. 

Uruguayan regulations allowed Alas Uruguay to keep its Air Operator Certificate for 60 days after it suspended operations pending a restart of flights but when this date passed in late December, the DINACIA Uruguayan aviation authority revoked Alas' AOC, rendering the carrier an entity unauthorized to operate with no discernible value to potential investors or buyers.

Sadly, Alas Uruguay appears to be permanently grounded after only nine months' flying.


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