LATAM Argentina suspended operations indefinitely (announced 17Jun20)

LATAM Argentina A320, LV-BSJ (c/n 1332), getting ready to taxi out at Buenos Aires Aeroparque (AEP) on 17Nov16.  This is one of three LATAM Argentina A320's that was repainted from LAN to LATAM colors soon after the carrier's change of identity (the others being LV-BRA and LV-BRY).  To the best of the blog editor's knowledge, no other LATAM Argentina A320's were painted into LATAM colors, remaining in LAN colors and titles, perhaps an indication of a reluctance to accept the merger with TAM Brazilian Airlines.  (Phil Perry Photo)       

LATAM Argentina (4M) announced on 17Jun20 that it would suspend operations indefinitely.

The stoppage included all domestic and international routes, the latter consisting of some regional South American services and Buenos Aires Ezeiza (EZE) to Miami (MIA) flights.  The international routes that are resumed when the COVID-19 quarantine is loosened (it is unlikely that all of them will start again) will be operated by other LATAM affiliates, such as LATAM Brazil, Chile and Peru), and not LATAM Argentina. 

Short-Term Reasons for Closure

The most immediate factors behind LATAM Argentina's "suspension" were the cessation of all commercial flights to/from and within Argentina, effective 20Mar20, due to the coronavirus, plus the Argentine government requirement that the carrier pay its employees most of their wages during the shutdown. 

All Argentine airlines, such as Aerolineas Argentinas, Andes, Austral, Flybondi, Jetsmart Argentina and LATAM Argentina lost nearly all of their revenue after 20Mar20 while still having to pay most of their fixed costs, such as aircraft leases and employee wages.  In particular, LATAM Argentina was not allowed to furlough employees and only managed to negotiate a 7% to 35% reduction in their pay, representing a huge cash drain for the carrier. 

Longer-Term Reasons for Closure

As difficult as 2020 was for LATAM Argentina, the carrier suffered increasingly poor financial results in recent years for a variety of reasons as detailed below

2018 Devaluation of the Peso 

The Argentine Peso / US Dollar exchange rate was about 20:1 in early 2018 but it was devalued to approx. 40:1 by September of that year, making USD-denominated costs, such as aircraft leases and fuel costs, twice as expensive in pesos. 

In the meantime, the airline could not raise airfares very much because most of its customers were Argentine, making more or less the same peso salaries after the devaluation as before.  

LATAM Argentina was also prevented from raising fares much because of the advent of Low Cost Carriers (LCC), such as Avianca Argentina, Flybondi and Norwegian Air Argentina.   

2019 Devaluation of the Peso  

The same phenomenon happened again in 2019 with another devaluation of the peso with respect to the USD from 40:1 to 70:1 in September 2019.  That year also saw the start up of another LCC, Jetsmart Argentina, putting more pressure on LATAM Argentina to keep fares down. 

Recession & International Travel Decline

Argentina went into recession in 2019, further eroding ticket sales, with an especially large drop in international revenue, as foreign travel became ever more expensive for Argentines due to the highly-unfavorable exchange rates with the USD.     

Employee Wage Levels

As an Argentine airline employing Argentine workers, LATAM Argentina was under pressure to pay their employees wages similar to those paid by Aerolineas Argentinas, the country's official flag carrier, that paid relatively high wages made possible by government subsidies, something that was unavailable to LATAM Argentina.   

Aerolineas Argentinas - Historical Favoritism

Ever since the Argentine government expropriated Aerolineas Argentinas from the Spanish travel groups Marsans in 2008, it has favored the state carrier in ways big and small.  Examples include:

* Gates with jetways at Buenos Aires Aeroparque (AEP) being reserved for Aerolineas Argentinas / Austral with other carriers having to use remote stands.         

* Attempted denial of use of a hangar at Aeroparque by LATAM Argentina.

* When LATAM Argentina sent Argentine-registered aircraft to the parent company's headquarters in Santiago, Chile for maintenance, they were not allowed to temporarily use Chilean-registered planes until the work was done on the Argentine aircraft and they returned to Argentina, resulting in a reduced schedule and lost revenue for the carrier.

Financial Results

The above factors are reflected in LATAM Argentina's eroding financial results in recent years:

2015:  US$ 9.4 million profit

2016:  US$ 29.6 million loss

2017:  US$ 41.6 million loss

2018:  US$ 132.5 million loss

2019:  US$ 133.4 million loss

In addition, 2019 revenue was US$ 585 million, 41% less than in 2018.

While many of LATAM Argentina's misfortunes have been due to external factors, such as the ones described above, the carrier's management should probably bear at least some responsibility for its loss of profitability, such as coming up with answers for the new competition from LCC's. 

LATAM Argentina - Historical Profile 

LATAM Argentina was founded in 2005 as LAN Argentina.

Fleet History

The carrier initially operated 737-200's transferred from parent carrier LAN Chile.

LATAM Argentina went on to operate 16 different A320's with 12 in service when it closed.  They were used for domestic and regional flights around South America.  All 16 aircraft were originally delivered to LAN Chile.   

The carrier also flew five different 767-300's with typically three in service at any one time on the Buenos Aires Ezeiza (EZE) - Miami (MIA) route.  All but one were original LAN Chile aircraft with the exception having been delivered to Russian carrier Transaero.  After the carrier's closure, two of the 767-300's went to LATAM Chile and one each to LATAM Colombia, LATAM Cargo and Canadian carrier CargoJet Airways.  

Destinations Served

LATAM Argentina was serving a total of 17 different airports prior to the 20Mar20 national quarantine. 

13 Domestic Airports 

Buenos Aires Aeroparque (AEP)

Buenos Aires Ezeiza (EZE)

Bariloche (BRC)

Comodoro Rivadavia (CRD)

Cordoba (COR)

El Calafate (FTE)

Mendoza (MDZ)

Neuquen (NQN)

Puerto Iguazu (IGR) 

Rio Gallegos (RGL)

Salta (SLA)

Tucuman (TUC)

Ushuaia (USH)

4 International Airports 

Lima (LIM) - LATAM hub

Santiago (SCL) - LATAM hub

Sao Paulo Guarulhos (GRU) - LATAM hub

Miami (MIA)

Network Expansion

With the nearly open skies ushered in by the administration of Argentine President Mauricio Macri in 2016, the LAN / LATAM group of carriers introduced services from several Argentine airports to the LAN / LATAM hubs of Santiago (SCL), Lima (LIM) and Sao Paulo Guarulhos (GRU).  

At one point, LAN / LATAM offered international flights from nine Argentine airports; Buenos Aires Aeroparque (AEP), Buenos Aires Ezeiza (EZE), Cordoba (COR), Mendoza (MDZ), Neuquen (NQN), Rosario (ROS), Salta (SLA), San Juan (UAQ) and Tucuman (TUC), more than any other airline group.  

LATAM Argentina operated at least two of these routes, Neuquen (NQN) and San Juan (UAQ) to Santiago (SCL), although they were cancelled when the country started to experience financial difficulties.   

LATAM Argentina also operated summer seasonal services from Argentina to Brazil. 

Other Data

The carrier had 1,715 employees in eight unions. 

LATAM Argentina had an 18% share of the Argentine domestic market - 2nd after Aerolineas Argentinas 

The LATAM group of carriers had a 23% share of the international market out of Argentina - 1st overall

The carrier most recently had an 80% load factor.

2019 - 2.53 million domestic passenger on 16,759 flights

2019 - 3.36 million international passenger on 21,674 flights 

Cargo: 

* Weekly average of 270 tons of exports (berries, fresh meats and pharmaceuticals) 

* Weekly average of 290 tons imports (auto parts, industrial machinery and pharmaceuticals)   

Sources:

https://www.cronista.com/apertura-negocio/empresas/Latam-cierra-su-filial-argentina-no-hara-vuelos-internos-de-pasajeros-ni-carga-20200617-0005.html

https://www.ambito.com/negocios/latam/cronica-un-retiro-anunciado-argentina-deja-operar-vuelos-cabotaje-n5110536

https://www.lanacion.com.ar/economia/nota-manana-nid2381063

https://www.airfleets.net/flottecie/LATAM%20Argentina.htm

https://argentina-airline-news.blogspot.com/2017/06/route-updates-latam-adding.html

https://argentina-airline-news.blogspot.com/search/label/LATAM%20Argentina

https://argentina-airline-news.blogspot.com/2017/02/route-updates-cordoba-cor-summer.html

HISTORICAL INTEREST: Three F-28's that flew with the Armada Argentina (Argentine Navy)

As already noted in previous posts, the Fokker F-28 enjoyed a long career in service with several branches of the Argentine government, including the Fuerza Aerea Argentina - as a military transport, VIP+Presidential aircraft and with Lineas Aereas del Estado, the air force airline that connects remote points of the Patagonia wilderness region in the south of the country.     

The Armada Argentina (Argentine Navy) also operated the F-28, being the last Argentine military service to receive the aircraft when it took delivery of three F-28-3000's in 1979.  The F-28-3000 had a 5-foot (1.5m) longer wingspan than the standard -1000 model at 82ft 3in / 25.07m with only 18 of the model being built out of a total of 241 F-28's. 

Fokker delivered all three F-28-3000's to the Armada Argentina between April and August 1979 in sequential order by their construction numbers; 5-T-20 (c/n 11145), 5-T-10 (c/n 11147) and 5-T-21 (c/n 11150), joining the 2nd Naval Mobile Logistical Air Support Squadron based at Buenos Aires Ezeiza (EZE).   

5-T-20 was an F-28-3000C model with a large main deck cargo door on the left side of the fuselage while the other two airframes were "M" models presumably configured for military personnel transport.  5-T-20 was also leased out to a civilian outfit named Charter Fly carrying the registration LV-RRA from January 1992 to September 1994. 

The three aircraft were reportedly all spotted at Buenos Aires Ezeiza (EZE) in 2014 with 5-T-10 painted all-white (apparently abandoned), 5-T-20 in the standard light blue Argentine Navy colors in an inactive state and 5-T-21 still operational in a darkish green low-visibility camouflage scheme.  

5-T-21's last flight was on 11Mar16 when it flew from EZE to Comandante Espora Airport in Bahia Blanca, the main base of Argentine Naval Aviation, for display at the National Naval Aviation Museum there.  

Armada Argentina F-28-3000M, 5-T-10 (c/n 11147), in the factory delivery color scheme at Buenos Aires Aeroparque (AEP) at an unknown date.  (Phil Perry Collection) 

Armada Argentina F-28-3000C, 5-T-20 (c/n 11145), also in the factory delivery color scheme at an unknown date and location.  (Phil Perry Collection)   

Sources:

https://loudandclearisnotenought.blogspot.com/2010/06/ara-07415-t-20-fokker-f-28-fellowship.html

https://loudandclearisnotenought.blogspot.com/2010/06/ara-07405-t-10-fokker-f-28-fellowship.html

https://loudandclearisnotenought.blogspot.com/2010/06/ara-07425-t-21-fokker-f-28-fellowship.html

http://linea-ala.blogspot.com/2014/05/algunas-imagenes-de-los-fokker-f-28.html

http://linea-ala.blogspot.com/2019/08/fin-del-fokker-f-28-fellowship-en.html

ROUTE UPDATES: Aerolineas adds more domestic flights out of EZE and American is flying daily EZE-MIA

Aerolineas Argentinas restarted regular domestic flights (as opposed to "special" flights) on 22Oct20 with about a half dozen roundtrip flights from Buenos Aires Ezeiza (EZE) to interior points.  

Those flights have since increased to about 12-15 daily roundtrips, including daily early morning departures to Mendoza (MDZ) and Cordoba (COR).   

The rest of the flights are distributed to several destinations around Argentina, with many important cities receiving flights on at least an every-other-day basis, including Bariloche (BRC), Corrientes (CNQ), Jujuy (JUJ), Neuquen (NQN), Puerto Iguazu (IGR), Rio Gallegos (RGL), Salta (SLA), Tucuman (TUC) and Ushuaia (USH).

Aircraft used include both Aerolineas Argentinas 737-800's and Austral E-190's. 

Internationally, American Airlines has been flying a 1x/daily Buenos Aires Ezeiza (EZE) - Miami (MIA) rotation with Aerolineas Argentinas flying the route several times per week too.  Both of the latter appear to be "regular" flights and not "special" flights.  

Air France, British Airways, Iberia, KLM, Lufthansa (including pure freighters), and Turkish have been flying approx. every-other-day with even Ethiopian and United flying occasionally too.  It is not clear if these are "regular" or "special flights.  

LATAM Brazil, LATAM Chile, LATAM Peru have also been flying every day with some of them reportedly being freight flights operated with passenger aircraft.

Interestingly, through most of the last 6-7 months, Qatar Airways has been flying and EZE - Quito (UIO) - Doha (DOH) freighter flight almost every day with a 777-200F.

Source:

www.aa2000.com.ar

HISTORICAL INTEREST: Three F-28's that flew with the FAA as VIP+Presidential Transports

The Fuerza Aerea Argentina operated three F-28's as VIP+Presidential aircraft until their retirement in recent years.  Two of these also wore the military registration T-50, apparently also flying regular air force missions for the FAA.

History of the individual aircraft: 

F-28 Mk. 1000 (c/n 11028)

(c/n 11028) during one of the times that it was operated as T-01 between 1970 and 1975 and again between 1977 and 1992.  Note that it had no titles.  (Phil Perry Collection)

Another photo of (c/n 11028) when it wore the registration T-03, also in the early color scheme but with Republica Argentina titles.  (Phil Perry Collection)

(c/n 11028) operating as T-03, takes off from Buenos Aires Aeroparque (AEP) on 03Oct10 wearing its last color scheme.  (Phil Perry Photo) 

Fuerza Aerea Argentina / Presidencia de la Nacion F-28 Mk-1000 (c/n 11028) was delivered by Fokker to the FAA on 28Dec70 taking on the Air Force registration T-01.  The aircraft went on to fly as T-02 and T-04 before assuming its final identity of T-03 in 1995, which it wore until its retirement on 20Apr15.  The plane went on to serve as a source of spares for the remaining F-28's in service with the FAA.  "11028" was the first F-28 to fly with an Argentine operator and also the longest-serving F-28 in Argentina with 49 years flying in the country.   

F-28 Mk. 1000 (c/n 11048) 

(c/n 11048) after its arrival in Argentina following the 1976 Farnborough International Airshow where it was on display wearing a Fokker company scheme.  The aircraft was already re-registered as LV-LZN for entry into service with Aerolineas Argentinas and was eventually repainted in the carrier's scheme of the time, although in all-red colors instead of the usual two-tone blue.  (Phil Perry Collection)  

(c/n 11048) at Buenos Aires Aeroparque (AEP) operating for the Fuerza Aerea Argentina's Presidential Flight Group as T-02 in February 1997.  (Adrian Arzenheimer Photo - Phil Perry Collection)

(c/n 11048), LV-LZN, in full Lineas Aereas Entre Rios colors with additional American Falcon titles at Buenos Aires Aeroparque (AEP) in December 2003.  (Phil Perry Collection) 

(c/n 11048) at Buenos Aires El Palomar (EPA) as T-50 on 18Dec19, apparently retired from service with the Fuerza Aerea Argentina.  (Phil Perry Photo)

F-28 Mk. 1000 (c/n 11048) had a varied operational history flying for several entities, including Fairchild Hiller to whom it was delivered in 1972, followed by Aviateca Guatemala, back to Fokker for promotional work and finally going to Aerolineas Argentinas registered as LV-LZN in late 1976.

(c/n 11048) joined the Fuerza Aerea Argentina in 1977 as T-02 and also T-04, reverting back to LV-LZN in the early 2000's when it flew for Lineas Aereas Entre Rios and American Falcon for a couple of years before rejoining the FAA in 2005 with the military registration T-50 where it flew for LADE.             

Interestingly, this aircraft was assigned to Pope John Paul II' for domestic flying within Argentina during his tour of the country in 1987, even carrying the Vatican emblem on the fuselage.  (c/n 11048) also had some mishaps, including an inflight depressurization in 1992, a runway excursion during landing in Salta province in 1993 and some damage at Buenos Aires Ezeiza (EZE) in 1998, for which it was repaired.           

(c/n 11048) was spotted at Buenos Aires El Palomar (EPA) on 18Dec19 wearing the registration T-50 in the last all-white Fuerza Aerea Argentina colors for this type, apparently out of service.

F-28 Mk. 4000 (c/n 11203)

(c/n 11203) flying as T-02 at Buenos Aires Aeroparque (AEP) on 10Jul10.  (Phil Perry Photo)

(c/n 11203) at Buenos Aires El Palomar (EPA) on 18Dec19.  Note the Argentine Air Force 707 and 757 T-01 "Tango Zero-Uno" parked behind the F-28.  All three aircraft were retired and in somewhat derelict condition.  (Phil Perry Collection)

F-28 Mk. 4000 (c/n 11203) was delivered to Korean Air in 1984 where it flew for several years before going on to the Fuerza Aerea Argentina's Presidential Flight Group as T-02 in 1999.  It flew the rest of its career for the FAA, for a short time as T-50 and then back to T-02, before being withdrawn from use on 19May17.   

This aircraft was a model 4000, some 2.5m (7.5 ft.) longer than the 1000 and 3000 models that comprised all of the other F-28's that served with the Argentine military.   

Sources:

https://loudandclearisnotenought.blogspot.com/search/label/Fokker%20F-28%20Fellowship

http://linea-ala.blogspot.com/2015/04/retiro-de-un-historico-avion.html

http://linea-ala.blogspot.com/2015/01/antes-de-venir-la-foto-que-faltaba.html