FLEET UPDATE: Aerolineas Argentinas retired A340's LV-CSE and LV-CSD in late 2017

Aerolineas Argentinas A340-313X, LV-CSD (c/n 123), pictured above was retired by the airline in November 2017.  (Phil Perry Collection)

Aerolineas also retired another A340-313X, LV-CSE (c/n 126), when it departed Buenos Aires Ezeiza (EZE) to Victorville (VCV), California, USA on 05Nov17 where it was destined to be scrapped for spare parts.   

This leaves Aerolineas Argentinas with three A340-313X's in its fleet, LV-CSF (c/n 128), LV-FPU (c/n 170), and LV-FPV (c/n 193) with LV-FPU flying the Buenos Aires Ezeiza (EZE) - Madrid (MAD) route on a regular basis lately, LV-FPV flying both the Madrid (MAD and Ushuaia (USH) routes and LV-CSF apparently inactive (all route data per flightradar24.com).

LV-FPU and LV-FPV are scheduled to leave the Aerolineas Argentinas fleet in late 2018 or early 2019 marking the retirement of the A340 from service with the Argentine national carrier.   

Sources:

http://linea-ala.blogspot.com.ar/2017/11/mas-novedades-en-aerolineas.html
http://www.airfleets.net/ficheapp/plane-a340-126.htm
http://www.airfleets.net/ficheapp/plane-a340-123.htm
http://www.airfleets.net/flottecie/Aerolineas%20Argentinas-active-a340.htm

FLEET UPDATE: Aerolineas Argentinas retired 737-700 LV-CYO in late 2017

Aerolineas Argentinas 737-7Q8, LV-CYO (c/n 30633/1220), taxis at Buenos Aires Aeroparque (AEP) on 07Aug16.  (Phil Perry Photo)

The above aircraft left the Aerolineas Argentinas fleet on 01Nov16 when it departed Buenos Aires Ezeiza (EZE) for Paine Field (PAE) in Everett, Washington USA for eventual delivery to Southwest Airlines as N7867A (the aircraft has yet to enter service with the carrier as of this writing).  Every former Aerolineas 737-700 has gone on to join Southwest.

Sources:

http://linea-ala.blogspot.com.ar/2017/11/aerolineas-argentinas-novedades.html
http://www.airfleets.net/ficheapp/plane-b737ng-30633.htm

FLEET UPDATE: Aerolineas Argentinas started process of replacing entire Austral E190 fleet

Austral E190, LV-GIQ (c/n 716), taxis at Buenos Aires Aeroparque (AEP) on 08Feb18.  Austral took delivery of LV-GIQ less than two years ago on 29Jul16, the 26th and last of example of the E190 to join the airline.  It was fresh from the factory on lease from Nordic Aviation Capital.  This aircraft and its 25 E190 stablemates will apparently start exiting the Austral fleet in the next year or so.    

Aerolineas Argentinas has formally started the process of replacing the entire E190 fleet of subsidiary Austral Lineas Aereas.  

Airbus, Boeing, Bombardier and Embraer invited to bid

The airline has solicited proposals from the world's four most important commercial aircraft manufacturers, Airbus, Boeing, Bombardier and Embraer, for replacement of Austral's entire fleet of 26 E190's on a one-for-one basis.  Aerolineas' president Mario Dell' Acqua at first indicated that the carrier would seek 170-180 seat replacements, suggesting a large increase in capacity considering that they would be replacing the 96-seat E190's.  This would have also ruled out Bombardier and Embraer from the competition due to their lack of such large aircraft with no plans to build any in the foreseeable future either.  

However, Mr. Dell' Acqua has also mentioned more recently the possibility of replacements having 130 seats, suggesting that there might be a mixed fleet of smaller and larger aircraft, presumably to serve smaller markets that are not large enough to support service by 180-seat aircraft, such as the Argentine cities of Rio Cuarto, Santa Rosa and Viedma.  He also recognized that many of these smaller markets have airports that the 737-800 cannot operate into.  
This might open the door a bit for Bombardier and Embraer but this would still favor Airbus and Boeing because they could offer both 130 and 180 seaters from their A320 and 737 families, respectively.

Austral's 24 owned E190's as Partial Payment for Replacement Aircraft

One of the conditions of the Request for Proposals (RFP) that Aerolineas has made is that the winning bid for a replacement aircraft must include acceptance of Austral's 24-owned E190's (the other two are leased) as partial payment for the new airframes.  Aerolineas tried to sell the 24-owned planes as one lot but found no takers and discovered in the process that the market for used E190's is very weak with the Austral examples being seven years old on average and having an appraised value of US$ 12 million each, way below the purchase price of US$ 34.9 million per example (which was reportedly inflated, more on that below).  Further deteriorating the value of Austral's E190's is their impending need for major maintenance almost simultaneously with one another, having been delivered in a short time frame starting in 2010. 

It's all about the Costs per Seat

The main reason behind the decision to replace the E190 fleet is the low operating costs in terms of Cost per Available Seat Mile (CASM) of larger aircraft such as the 737-800, of which Aerolineas already has has 31, and especially of the new 737 MAX 8, which Aerolineas has three of so far with more on order.  

The cost difference can be seen when comparing fuel consumption of the E190 to its potential replacements.      

Wikipedia reports the following fuel consumption data on the listed aircraft on typical 550-600 mile sectors without specific mention of wind / weather conditions or operating weights, but presumably with loads taking advantage of each aircraft's capabilities:

The E190 typically consumes 2.98 kg/km (10.6 lb/mile), which with 96 seats = 3.81 liters/100km/seat

The planned E190 replacement, the E190-E2 with geared turbofan engines and many other improvements, burns 2.83 kg/km (10.04 lb/mile), which with its 106 seats = 3.32 liters/100km/seat, a 12.9% improvement compared to the E190.  

Similarly, the 737-800 consumes 3.59 kg/km (12.7 lb/mile), which divided by its 162 seats = 2.77 liters/100km/seat, 27.3% less than the E190.

Finally, the new 737 MAX 8 uses 3.04 kg/km (10.8 lb/mile), which with 166 seats = 2.28 liters/100km/seat, a whopping 40.2% less than the E190.

Most other costs, such as ground handing and flight crew expenses are about the same for all of the above aircraft.      

Flight Frequency not a Priority in Argentina

Of course, if the only consideration for airlines was the operating cost per seat, then they would all fly the A380 !  The aircraft that they fly to each city need to be the appropriate size for the number of passengers that the local market can generate plus even large markets do not want to be served exclusively by large aircraft even though they can support them.  Larger aircraft = fewer flights while smaller aircraft allow for more frequent flights, which is important in city pairs with a lot of business traffic. 

For example, New York to Boston, Chicago, London, Los Angeles, San Francisco and Washington are all markets where business travelers demand frequent flights so that they can fly when it is convenient for them.  Other examples include Los Angeles - San Francisco, Dallas - Houston, Toronto - Montreal, London - Paris, Tokyo - Osaka, Beijing - Shanghai, and Sydney - Melbourne.

New York - Boston is served primarily by shuttle flights operated by Delta 717's and American E-190's, both with approx. 100 seats.

However, Argentina is different in that the only frequency-sensitive market is between the nation's two largest cities, Buenos Aires - Cordoba, with approx. 10-12 daily flights between Buenos Aires Aeroparque (AEP) and Cordoba (COR) supplemented by a few flights from Buenos Aires Ezeiza (EZE) and now Buenos Aires El Palomar (EPA) to Cordoba too.  With frequency being relatively unimportant, larger aircraft with lower CASM's become more attractive for Aerolineas Argentinas / Austral, especially with the incipient competition from Flybondi and Norwegian Air Argentina, both of which are using or plan to use the 737-800 and/or the 737 MAX 8 with low CASM's, allowing them to offer low fares true to their mission as Argentina's first LCC's.       

New Aircraft Timings     

At one time it was suggested that Aerolineas might take Austral's E190's out of service at an accelerated rate but it has been suggested more recently that the pace would probably be 4-5 aircraft per year divided in two stages of 12 aircraft followed by the remaining 14 airframes.  

The speed of delivery of the new planes will likely be determined at least partly by the chosen manufacturer's ability to deliver new aircraft given its commitments to other airlines and the rate at which Aerolineas' can train new pilots to fly them. 

E190 Disposal = Large Cash & Accounting Losses     

Aerolineas hesitated over the last few months on its decision to retire Austral's E190 fleet because of the likely heavy financial losses such a move would incur. 

The remaining debt on the aircraft will likely exceed the value that the airline group will be credited towards the purchase / lease of new aircraft plus the E190's have apparently been depreciated much more slowly in Aerolineas' accounting books than the rate at which the aircraft have lost market value,
which will result in an accounting loss as well as the actual cash loss. 

Stating the situation in actual numbers, Aerolineas purchased Austral's initial batch of 22 E190's for US$ 34.9 million each (approx. US$ 4.9 million more than E190's were typically being sold for at that time but that would be the subject of another posting !).

22 aircraft x US$ 34.9 million = US$ 768 million paid for with a 15% deposit with the remaining 85%, US$ 653 million, financed by the Bndes Brazilian government development bank at an interest rate of 7.45%.  Until recently, Aerolineas still owed US$ 360 million of that loan.  With the market value of Austral's E190's currently estimated at US$ 12 million each x 22 aircraft = US$ 264 million, the carrier would have been US$ 96 million short of paying off the debt with the proceeds from the sale of the planes.               

Aerolineas tried to renegotiate the terms of the debt with the Bndes to no avail, choosing instead to take a commercial loan at 4% to retire the debt, thereby saving considerable interest expense in the process.  While the loss is reduced it is still considerable.

Aerolineas stands to also take a large accounting loss from the sale of Austral's E190's because they have been depreciated at a rate slower then their decline in market value.  They are said to each have a value of US$ 24 million on the company's books, which while being worth US$ 12 million as mentioned above would mean a staggering 22 x US$ 12 million = US$ 264 million extraordinary accounting loss, just as the airline has successfully reduced losses from approx. US$ 1 thousand million (billion) earlier in this decade to an expected US$ 90 million in 2018.  

The political cost to the administration of Argentine president Mauricio Macri of such a large financial step backwards by the state-owned carrier could be considerable.          
  
Sources:

http://www.airfleets.net/ficheapp/plane-e190-716.htm  http://www.siscoma.com.ar/online/aviacion/2017/avn171005/avn-171005.html
http://www.siscoma.com.ar/online/aviacion/2017/avn171207/avn-171207.html
http://www.lanacion.com.ar/2094329-la-venta-de-los-embraer-podria-ocasionarle-una-gran-perdida-a-aerolineas
http://www.lanacion.com.ar/2103867-aerolineas-inicio-el-proceso-para-reemplazar-los-aviones-embraer
https://en.wikipedia.org/wiki/Fuel_economy_in_aircraft
http://www.siscoma.com.ar/online/aviacion/2018/avn180201/avn-180201.html
http://www.siscoma.com.ar/online/aviacion/2018/avn180215/avn-180215.html

FLEET UPDATE: Andes received its 4th 737-800 on 28Jan18

Andes Lineas Aereas' fourth 737-800, LV-HLK (c/n 30883/783), arrived at Buenos Aires Ezeiza (EZE) on 28Jan18 after its delivery flight from Shannon (SNN) via Sal, Cape Verde (SID) and Natal (NAT).

Andes is expected to take delivery of at least two more 737-800's with this type expected to eventually replace the carrier's MD-80 fleet.  Nonetheless, Andes reportedly might add another MD-80 to its fleet in the short term.   

Per flightradar.com and other sources, LV-HLK had not entered service as of this writing.

Source:

http://linea-ala.blogspot.com.ar/2018/01/el-cuarto-para-andes.html

NEW AIRLINE PLANS: Norwegian Air Argentina received its Argentine AOC on 27Jan18

Norwegian Air Argentina (NAA) received its Air Operator Certificate from the Argentine government on 27Jan18, only a few months after having applied for it, much faster than the nine months that it took Flybondi to receive theirs, presumably because the latter carrier is a start-up airline with no previous operational history compared to NAA's parent company, which is well-established and the sixth-largest Low Cost Carrier (LCC) in the world.    

NAA requested 75 domestic and 80 international routes at the 06Sep17 route hearings, of which only three domestic routes were denied with all 80 international sectors approved.  Of these, 14 domestic and 30 international city pairs currently have no same-plane service.  In all likelihood, NAA will operate only a relatively small number of the requested routes but, even so, the new routes will add a significant amount of additional airline service options to the Argentine flying public.

Aircraft to be used by NAA include 737-800's initially with the eventual addition of 737 MAX 8's and/or A321neo LR's plus the 787-8/9 for long-haul intercontinental sectors.  

NAA received its first aircraft, 737-800 LV-HQH (c/n 42278/6347), on 15Jan18 and is expected to start regularly scheduled service in the second half of 2018. 

Source:

http://www.sirchandler.com.ar/2018/01/norwegian-ya-certificado-operador-adelantara-operaciones/

FLEET & ROUTE UPDATES: Flybondi receives its second 737-800, LV-HFR

Flybondi's second 737-800, LV-HFR (c/n 28071/133), arrived at Cordoba (COR) at 6:12am this morning after a delivery flight from Istanbul via Las Palmas, Canary Islands and Recife, Brazil which started on 14Feb18.  

The aircraft was inspected by the Argentine national civil aviation authority (ANAC) in Istanbul and all the necessary paperwork completed earlier this month allowing it to enter service a mere 11 hours after arriving on Argentine soil when it operated flight FO5432 from Cordoba (COR) to Puerto Iguazu (IGR) departing at 5:06pm with a full load of 191 passengers.

LV-HFR is a welcome addition to the Flybondi fleet as the airline has encountered nagging reliability problems trying to operate is fledgling route system with just one airplane.  Flybondi even contracted with Andes Lineas Aereas to operate some of its flights yesterday and today due to the Aircraft on Ground (AOG) situation. 

Flybondi's route system currently consists of the following city pairs: 

Cordoba (COR) - Bariloche (BRC)
Cordoba (COR) - El Palomar (EPA) 
Cordoba (COR) - Mendoza (MDZ)
Cordoba (COR) - Puerto Iguazu (IGR)
Mendoza (MDZ) - Bariloche (BRC)
Mendoza (MDZ) - Puerto Iguazu (IGR)

The airline is due to add the following routes during the rest of February:

El Palomar (EPA) - Bariloche (BRC) - eff 26Feb
El Palomar (EPA) - Neuquen (NQN) - eff 26Feb
El Palomar (EPA) - Tucuman (TUC) - eff 28Feb

And the following city pairs in the coming months:

El Palomar (EPA) - Corrientes (CNQ) - eff 05Mar
El Palomar (EPA) - Mendoza (MDZ) - eff 05Mar 
El Palomar (EPA) - Jujuy (JUJ) - eff 13Mar
El Palomar (EPA) - Posadas (PSS) - eff 30Apr
El Palomar (EPA) - Bahia Blanca (BHI) - eff  03May
El Palomar (EPA) - Salta (SLA) - eff 07May
El Palomar (EPA) - Santiago del Estero (SDE) - eff 10May

Flybondi is due to take delivery of a third 737-800 before the end of February but with the first two aircraft having been delivered late, the third will probably be delayed too.  

Sources:

https://aviacionline.com/2018/02/llego-a-la-argentina-el-segundo-avion-de-flybondi-lv-hfr/
https://aerospotter.blogspot.com.ar/2018/02/el-segundo-paso-de-flybondi.html

ROUTE UPDATE: Norwegian Air UK started LCC transatlantic service between London Gatwick (LGW) and Buenos Aires Ezeiza (EZE)

Norwegian Air UK started Low-Cost Carrier (LCC) service from London Gatwick (LGW) to Buenos Aires Ezeiza (EZE) on 14Feb18 with its first flight DI7505 arriving at EZE at 9:14am this morning with its inaugural northbound flight DI7606 departing EZE to LGW at 1:39pm this afternoon.  

The flight was also a first for the aircraft operating the service, 787-9 G-CKOF (c/n 38786/662), as it performed its first revenue service for Norwegian, having been delivered to the airline just last week on 06Feb18.       

Norwegian Air UK will operate four round-trip weekly flights between LGW and EZE.

Source:

https://aerospotter.blogspot.com.ar/2018/02/llego-norwegian.html

PHOTO GALLERIES: Gol 737-800 PR-GUO in "Rock in Rio 2017" scheme at Aeroparque on 08Feb18

Gol Linhas Aereas Inteligentes 737-800, PR-GUO (c/n 35850/4124), in a special scheme commemorating the "Rock in Rio 2017" international music event landing at Buenos Aires Aeroparque (AEP) on 08Feb18. (Phil Perry Photo)

FLEET UPDATE: Andes added Christmas stickers to 737-800 LV-WGL

UPDATED 10Feb18:  Andes Lineas Aereas 737-800, LV-WGL (c/n 30007/746), sporting special Christmas stickers taxis at Buenos Aires Aeroparque (AEP) on 08Feb18. (Phil Perry Photo)  

Andes added Christmas stickers to 737-800, LV-WGL (c/n 30007/746), the first 800 to join its fleet back in May 2017.  The stickers consist of a jovial Santa Claus on the lower tail and bag tags with the three-letter codes of the twelve destinations that it serves with regularly-scheduled service.