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.

Sources:

http://www.siscoma.com.ar/online/aviacion/2016/avn160721/avn-160721.html
http://www.portaldeamerica.com/index.php/columnistas/sergio-antonio-herrera/item/23064-alas-uruguay-del-glamour-a-la-verdad
http://www.elobservador.com.uy/alas-analiza-suspender-vuelos-comerciales-y-hacer-solo-charter-n946070
http://portaldeamerica.com/index.php/pda/editorial/item/23546-estado-de-situacion-de-alas-uruguay
http://portaldeamerica.com/index.php/pda/entrevistas-y-reportajes/item/23560-se-fue-el-primer-avion-que-trajo-alas-uruguay
http://portaldeamerica.com/index.php/pda/editorial/item/23570-alas-cortadas-de-tal-palo-tal-astilla-y-slots-disponibles-en-el-analisis-de-alas-uruguay
http://www.siscoma.com.ar/online/aviacion/2016/avn161027/avn-161027.html
http://www.siscoma.com.ar/online/aviacion/2016/avn161103/avn-161103.html
http://www.siscoma.com.ar/online/aviacion/2016/avn161110/avn-161110.html
http://www.siscoma.com.ar/online/aviacion/2016/avn161229/avn-161229.html         

FLEET UPDATE: Alas Uruguay returns one 737-300, drops Asuncion (ASU), might return 2nd 737-300

Alas Uruguay continues to soldier on flying the Montevideo (MVD) - Buenos Aires Aeroparque (AEP) route 2x/daily on most days but recently returned 737-33R, CX-OAB (c/n 28869/2887) to lessor Aergo Group and it also stopped flying its only other route from Montevideo (MVD) to Asuncion (ASU).  

CX-OAB flew directly from Montevideo (MVD) to Santiago (SCL) on 24Aug16 where it has joined the fleet of Chilean carrier Latin American Wings. Additionally, Alas Uruguay was at one point without any operational aircraft for several days in late September while 737-36N, CX-OAA (c/n 28569/2996) was out of service pending some work and the only other plane in the carrier's fleet 737-36N, CX-OAC (c/n 28563/2921) had a defective wing part with no replacement available until a few days later when a spare arrived from the United States.

As of August, the airline had a load factor of 53%, lower than the break-even number of 67%, but still above the level projected in the carrier's business plan at this stage in its history.  65% of Alas' passengers are Uruguayan but the number of Argentines traveling on the airline is expected to go up as it becomes better known in that country.       

In addition to stiff competition from Aerolineas Argentinas / Austral on the Buenos Aires Aeroparque (AEP) - Montevideo (MVD) "Air Bridge", Alas Uruguay also has a new competitor on the route, Amaszonas Uruguay, the new Uruguayan affiliate of the Bolivian carrier Amaszonas, that is operating 2x/daily CRJ-200 service between the two cities.      

The latest rumors are that CX-OAA might be returned to GECAS soon since the one remaining aircraft would be enough to operate the "Air Bridge" 2x/daily flights, although that would leave no room to spare in case of a mechanical problem with the plane, in which case passengers would have to be redirected to the other two carriers on the route.

Sources:

http://www.siscoma.com.ar/online/aviacion/2016/avn160811/avn-160811.html
http://linea-ala.blogspot.com.ar/2016/08/alas-u-devolvio-un-avion.html
http://portaldeamerica.com/index.php/pda/otras-noticias/item/23387-ley-de-murphy-o-gualicho-el-unico-avion-operativo-de-alas-uruguay-fuera-de-servicio
http://portaldeamerica.com/index.php/pda/otras-noticias/item/23388-alas-uruguay-se-acelera-despreservacion-del-cx-oaa-y-en-48-horas-volaria
http://portaldeamerica.com/index.php/pda/primera-plana/item/23397-alas-uruguay-sobre-el-fin-de-semana-reanudara-sus-servicios
http://www.portaldeamerica.com/index.php/columnistas/sergio-antonio-herrera/item/23500-intensas-gestiones-por-alas-uruguay   

Alas Uruguay - Financial Results, Talks with Azul and Boliviana & Returning One 737-300

Alas Uruguay continues to establish itself on the Montevideo (MVD) to Buenos Aires Aeroparque (AEP) and Asuncion (ASU) routes (also Aeroparque to Punta del Este (PDP) in the summertime) but has fallen well short of revenue projections made in it business plan. 

Passengers Flown

The carrier had flown 27,000 passengers between its 22Jan16 inaugural flight and mid-May, broken down into 800 in January, 2,000 in February, 7,500 in March, and 8,500 in April with a forecast of 8,800 travelers in May.  

Market Share

Alas' market share on the all-important Montevideo (MVD) - Buenos Aires Aeroparque (AEP) route was approx. 20% with 13 weekly flights vs. Aerolineas Argentinas' 80% with 32 weekly services as of mid-May but it is gaining ground by about 4-5 percentage points per month, which is not surprising because even being a relatively unknown carrier, the passengers flying this route overwhelmingly originate in the Argentine and Uruguayan capitals with many of them being frequent flyers so it is natural for them to learn about Alas Uruguay without the carrier investing a lot in advertising.  Both carriers charge an average of US$ 195 round-trip on the route.  

Alas flies its other route, Montevideo (MVD) - Asuncion (ASU), 3x/weekly in competition with Amaszonas Paraguay's 10x/weekly flights using CRJ-200's.  

Financial Results

The carrier had US$ 1.3 million in revenue in April and a similar amount in May but this is putting it on track to reach only 25% of its business plan projection of US$ 66 million for its first year of operations.  With monthly expenses in the US$1.6 million range, the airline is losing money.  Alas had projected a 60% load factor but was averaging only about 30%-40% full as of mid-May. 

Alas' employees are reportedly collecting only 50% of their salaries, directing the other 50% to capitalizing the company.  Even so, the airline has fallen behind in paying the reduced amounts.  

By July, the airline's outlook appeared to improve a little bit as it paid back much of the backwages owed and its Aeroparque flights were reportedly completely full due to the Uruguayan and Argentine winter vacation periods.  

Talks with Azul and Boliviana

Alas is also continuing some of the talks that it has already had with other carriers in the past about possible cooperation, mergers or takeovers with one of the latest discussions reportedly being with Azul Linhas Aereas about an investment that the latter wants to make in the Uruguayan airline but only if Alas reduces the number of employees on its payroll, returns all of its 737-300's and replaces them with ATR aircraft (which Azul already operates) and allows Azul to manage the airline, with Alas' management only accepting the proposed change of aircraft so far.  

Boliviana de Aviacion, the state-owned Bolivian 737-300 operator, offered to invest US$ 5 million with co-management of Alas Uruguay at first likely passing on to Boliviana control in a few months with a deadline of 22Jul16 for Alas to make a decision but there has been no news so far.     
Returning one 737-300

Most recently, it became evident that the carrier was going to have to cut back on fixed costs and it announced that it will seek to return one of its three 737-300's, CX-OAB (c/n 28869/2887), to the lessor.   Alas is paying US$ 80,000 per month leases on the 737-300's and it apparently only needs two aircraft for the current level of scheduled service.   

Sources:

http://www.portaldeamerica.com/index.php/columnistas/sergio-antonio-herrera/item/23019-alas-uruguay-acevedo-y-de-los-santos-contra-todos
http://www.portaldeamerica.com/index.php/pda/entrevistas-y-reportajes/item/22770-entre-el-cielo-y-la-tierra-las-alas-de-la-discordia
http://www.portaldeamerica.com/index.php/columnistas/sergio-antonio-herrera/item/22729-alas-uruguay-es-preferible-el-silencio

Alas Uruguay - Summary of Developments - September 2015 - May 2016

Alas Uruguay 737-33R, CX-OAB (c/n 28869/2887) pushes back at Buenos Aires Aeroparque (AEP) on 17Mar16.  (Phil Perry Photo) 

The last posting on this blog regarding Alas Uruguay was in August 2015.

Since then the carrier has taken delivery of its third 737-300, completed the process of acquiring its Air Operator Certificate (AOC), and started scheduled service from Montevideo (MVD) to Asuncion (ASU) and Buenos Aires Aeroparque (AEP).     

Alas Uruguay was launched in recent years by former PLUNA employees and the Uruguayan government looking to find gainful employment for the workers and replace some of the air connectivity that was lost when the former national airline was abruptly shutdown by Uruguayan President Jose Mujica on 05Jul12 due to the carrier's continuing losses.

Alas, which was at one point to be organized as a worker's cooperative, was instead formed as a corporation with the former PLUNA workers owning most of the carrier.  The FONDES Uruguayan government business development fund granted Alas a US$ 15 million loan to be taken in installments to be paid back over a 10-year term to help the airline literally get off the ground. 

Alas contracted to lease three 737-300's with plans to deploy them on many of the same routes flown previously by PLUNA to Argentina, Brazil, Chile and Paraguay with the most important route by far being the highly-profitable "Air Bridge" between Buenos Aires Aeroparque (AEP) and Montevideo (MVD).  

First 737-300

The first 737-300, put on the Uruguayan register as CX-OAA (c/n 28569/2996), was delivered to Alas on 28Jan15, though it spent several months in Porto Alegre (POA) undergoing preparations for entry into service prior to flying to Alas' Montevideo (MVD) base.  It was originally delivered to Air France in 1998 but mostly flew for Ukraine International Airlines before going on to Alas.  

Second 737-300

Alas' second 737-300, CX-OAB (c/n 28869/2887), was delivered on 06Mar15 after having flown for Western Pacific Airlines, Olympic Airways/Airlines, and Ukraine International since its original delivery in June 1997.  

Third 737-300

Alas took delivery of its third 737-300, CX-OAC (c/n 28563/2921), on 14Nov15 having previously flown for Frontier Airlines (to which it was delivered in August 1997) followed by Virgin Nigeria, SAMA (Saudi Arabia) and VivaAeroBus (Mexico).    

Certification Process

The airline went through 5 phases to gain its Air Operator Certificate (AOC) from the DINACIA Uruguayan aviation regulatory authority.  The fourth and fifth phases took place in late 2015 consisting, respectively, of three route-proving flights designed to test Alas' readiness to carry out real-world scheduled airline operations and the preparation of extensive formal documentation for approval by the DINACIA.  Alas finally concluded the certification process that it began on 06Jun14 when it received its AOC from the DINACIA on 30Oct15.

Start of Scheduled Service

After going online in December 2015 with its own website and the Amadeus global distribution system used by travel agencies, the carrier was ready to initiate scheduled operations with the inaugural flight taking place from Montevideo (MVD) to Asuncion (ASU) on 21Jan16.   

Buenos Aires Service

'

A big breakthrough for Alas was the change of government in Argentina on December 10, 2015 with the new president being much more open to allowing airline competition to/from and within Argentina with the result that the Argentine ANAC aviation authority granted permission to Alas to operate up to five daily flights on the Buenos Aires - Montevideo "Air Bridge", although the carrier is flying this route with only two daily flights so far.  The first Alas Uruguay scheduled flight from Montevideo (MVD) to Buenos Aires Aeroparque (AEP) was operated on 27Jan16 by aircraft CX-OAA. 

Alas Uruguay has faced stiff competition from Austral (Aerolineas Argentinas' sister carrier) and its 100-seat E190 jets on this route with Alas' load factors reportedly being about 28%.

Financial Situation, Boliviana & Amaszonas

As of this writing, Alas has accessed nearly all of its credit line with the FONDES and has reportedly been looking for more funds from the Uruguayan government. It has also talked with the two main Bolivian airlines about possible alliances and investment; the state-owned Boliviana de Aviacion and the privately-held Amaszonas, which is starting its own Uruguayan unit called Amaszonas Uruguay with CRJ-200 regional jets. 

However, discussions with Amaszonas broke off when it indicated that it wanted Alas to keep only 30% of its 200-person workforce and return all of its 737-300's to the lessors as requirements for cooperation to take place. 

And talks with state-owned Boliviana also ended when the airline discovered that Alas was organized as a "Sociedad Anonima" (corporation) and not as a worker's cooperative, which would have meant a guarantee of ongoing Uruguayan government assistance to the carrier.    

A request by Alas for US$ 6 million in further assistance from the Uruguayan government has apparently also been not well received. 

  

In the meantime, the money received from the FONDES is supposed to run out by the end of May, leaving the carrier to fund operations from flight revenue. Alas recently postponed certification procedures for its third 737-300, CX-OAC, which might be interpreted as a cost-saving measure. 

Sources:

http://www.airfleets.net/flottecie/Alas%20Uruguay-active-b737.htm

http://www.siscoma.com.ar/online/aviacion/2015/avn150820/avn-150820.html

http://www.portaldeamerica.com/index.php/pda/otras-noticias/item/21475-alas-uruguay-en-las-gateras-espera-timbre-de-largada

http://www.portaldeamerica.com/index.php/pda/otras-noticias/item/21601-alas-uruguay-en-instancias-finales-de-certificacion 

http://www.siscoma.com.ar/online/aviacion/2015/avn151001/avn-151001.html

http://www.siscoma.com.ar/online/aviacion/2015/avn151015/avn-151015.html

http://www.portaldeamerica.com/index.php/pda/otras-noticias/item/21672-primer-vuelo-de-intsruccion-de-alas-uruguay

http://www.portaldeamerica.com/index.php/pda/otras-noticias/item/21678-martes-13-comienzan-vuelos-de-prueba-de-alas-uruguay

http://www.portaldeamerica.com/index.php/pda/otras-noticias/item/21686-exitoso-primer-vuelo-de-prueba-de-alas-uruguay

http://www.portaldeamerica.com/index.php/pda/otras-noticias/item/21693-este-jueves-15-se-reanudan-vuelos-de-prueba-de-alas-uruguay

http://www.portaldeamerica.com/index.php/columnistas/alejandro-spera/item/21699-primeras-10-horas-de-vuelo-de-alas-uruguay-cumplidas-satisfactoriamente

http://aerospotter.blogspot.com.ar/2015/10/primer-paso-de-alas-urruguay.html

http://www.elpais.com.uy/informacion/alas-uruguay-iniciar-vuelos-diciembre.html

http://www.siscoma.com.ar/online/aviacion/2015/avn151029/avn-151029.html

http://www.portaldeamerica.com/index.php/pda/otras-noticias/item/21785-alas-uruguay-la-nueva-aerolinea-certificada-del-uruguay

http://www.siscoma.com.ar/online/aviacion/2015/avn151105/avn-151105.html

http://www.portaldeamerica.com/index.php/pda/otras-noticias/item/21814-alas-uruguay-que-la-politica-no-afecte-la-logica

http://www.siscoma.com.ar/online/aviacion/2015/avn151112/avn-151112.html

http://aeronavescx.blogspot.com.ar/2015/11/llego-el-3er-boeing-de-alas-uruguay.html

http://aerospotter.blogspot.com.ar/2015/11/llego-el-tercer-737-de-alas-uruguay.html

http://www.siscoma.com.ar/online/aviacion/2015/avn151119/avn-151119.html

http://www.siscoma.com.ar/online/aviacion/2015/avn151210/avn-151210.html

http://www.portaldeamerica.com/index.php/pda/otras-noticias/item/22009-alas-uruguay-activan-canales-de-distribucion-amadeus-y-sabre

http://www.portaldeamerica.com/index.php/pda/editorial/item/22109-mala-memoria-y-mas-de-lo-mismo-cuando-uruguay-vuelve-a-tener-alas

http://aeronavescx.blogspot.com/2016/01/alas-uruguay-inicio-oficialmente-sus.html

http://www.ch-aviation.com/portal/news/43297-alas-uruguay-commences-scheduled-operations

http://aeronavescx.blogspot.com/2016/01/alas-u-inicio-hoy-vuelo-montevideo.html

http://www.siscoma.com.ar/online/aviacion/2015/avn151217/avn-151217.html

http://www.siscoma.com.ar/online/aviacion/2015/avn151231/avn-151231.html

http://www.portaldeamerica.com/index.php/pda/otras-noticias/item/22123-hoy-formalmente-uruguay-vuelve-a-tener-alas

http://www.siscoma.com.ar/online/aviacion/2016/avn160121/avn-160121.html

http://www.siscoma.com.ar/online/aviacion/2016/avn160128/avn-160128.html

http://www.portaldeamerica.com/index.php/pda/otras-noticias/item/22258-alas-uruguay-aumenta-frecuencias-en-la-ruta-montevideo-asuncion

http://aerospotter.blogspot.com.ar/2016/02/roll-out-n-304-fleet-list.html

http://www.siscoma.com.ar/online/aviacion/2016/avn160211/avn-160211.html

http://www.siscoma.com.ar/online/aviacion/2016/avn160218/avn-160218.html

http://www.siscoma.com.ar/online/aviacion/2016/avn160331/avn-160331.html

http://www.siscoma.com.ar/online/aviacion/2016/avn160407/avn-160407.html

http://www.portaldeamerica.com/index.php/columnistas/sergio-antonio-herrera/item/22507-herrera-en-tv-gobierno-precisa-asesorarse-en-aviacion-comercial

http://www.siscoma.com.ar/online/aviacion/2016/avn160414/avn-160414.html

http://www.portaldeamerica.com/index.php/columnistas/sergio-antonio-herrera/item/22592-amaszonas-alas-uruguay-un-ano-y-algo-despues

http://www.portaldeamerica.com/index.php/columnistas/sergio-antonio-herrera/item/22663-alas-uruguay-boa-fusion-alianza-estrategica-o-absorcion

http://www.elobservador.com.uy/alas-uruguay-firmo-un-acuerdo-aerolinea-estatal-boliviana-n906647

http://www.elobservador.com.uy/alas-uruguay-pidio-aplazar-certificacion-su-tercer-avion-n891767

http://www.elobservador.com.uy/alas-uruguay-se-queda-credito-oficial-y-bolivia-analiza-capitalizarla-n907188

http://www.portaldeamerica.com/index.php/columnistas/sergio-antonio-herrera/item/22675-ni-bolivia-invierte-en-la-aviacion-comercial-uruguaya

Alas Uruguay Update: Certification is Delayed, 2nd 737-300 is delivered, Planned Routes Announced

Alas Uruguay continues the process of obtaining its airline operating certificate, which it began in July 2014 and was originally expected to take six months but has now surpassed a year.  One of the problems encountered by the planned start-up carrier was missing documentation for one of the engines of its first 737-300, CX-OAA (c/n 28569/2996).  This engine, in turn, was due to be replaced with another one in early August.  Certification of the airline is expected in the next month or two but certification has been imminent for several months now. 

In the meantime, the airline took delivery of its second 737-300, CX-OAB (c/n 28869/2887) on 02Jul15.  Like CX-OAA, CX-OAB is leased from Irish lessor Aergo Capital and previously flew for Air Ukraine.  Alas Uruguay's third 737-300, leased from Cara Capital of Deerfield Beach, Florida and expected to be registered CX-OAC, is currently being painted in the Uruguayan airline's colors in Tucson, Arizona with its tentative arrival in Montevideo (MVD) scheduled for mid-August. 

Alas Uruguay recently announced the routes that it plans to fly initially, without giving specific start dates, as follows:

Montevideo (MVD) - Buenos Aires Aeroparque (AEP), 5x/daily 

Montevideo (MVD) - Asuncion (ASU), 1x/daily

Montevideo (MVD) - Santiago (SCL), 1x/daily

Montevideo (MVD) - Sao Paulo Guarulhos (GRU), 2xdaily

Punta del Este (PDP) - Buenos Aires Aeroparque (AEP), 1x/daily 

While the airline hopes to start these services soon after certification, Portal de America reports that route permissions from the Paraguayan authorities should take approx. 30 days, the Chileans 45 days and Brazilians 90-120 days.  And the Argentine aviation agency has approved few new route requests at all during the last few years (although more have been approved lately, especially from Brazilian airlines). 

The best photo that the editor of this blog has seen yet of Alas Uruguay 737-300, CX-OAA is the following from World Airline News:

https://airlinersgallery.smugmug.com/Airlines-CSAmerica-1/Airlines-Latin-America1-AF/Alas-Uruguay/i-X7hJpDd/A

Sources:

http://www.siscoma.com.ar/online/aviacion/2015/avn150416/avn-150416.html
http://aerospotter.blogspot.com.ar/2015/06/segundo-avion-para-alas-uruguay.html
http://airlineroute.net/2015/06/19/yz-s15proposal/ via Eric Trum
http://www.siscoma.com.ar/online/aviacion/2015/avn150702/avn-150702.html
http://www.portaldeamerica.com/index.php/columnistas/sergio-antonio-herrera/item/21260-mala-noticia-para-muchos-alas-uruguay-certificar%C3%A1-en-agosto
http://aeronavescx.blogspot.com.ar/2015/07/3er-boeing-737-300-de-alas-uruguay.html
http://aeronavescx.blogspot.com.ar/2015/07/3er-boeing-de-alas-u-en-proceso-de.html

FLEET UPDATE: Alas Uruguay about to receive 2nd 737-300, CX-OAB, entering Fourth Phase of Certification Process

Alas Uruguay's second 737-300, CX-OAB (c/n 28869) will soon fly to the airline's Montevideo (MVD) base after it has been painted in the carrier's colors in Porto Alegre (POA).  

When the aircraft arrives, it will join the first 737-300 delivered to Alas Uruguay, CX-OAA, as the new airline enters the "Demonstration" phase of its certification process by the DINACIA Uruguayan aviation authorities, which will consist of verifying flight crew training, maintenance capabilities and other necessary infrastructure to operate a safe, and regulation-compliant service.

The carrier is expected to start operations flying charters followed by scheduled service in the coming months. 

Sources:

http://www.portaldeamerica.com/index.php/pda/otras-noticias/item/20903-segundo-avi%C3%B3n-de-alas-uruguay-muy-pronto-en-uruguay
http://www.airfleets.net/flottecie/Alas%20Uruguay-active-b737.htm

FLEET UPDATE: Alas Uruguay's first 737-300, CX-OAA, arrives in Montevideo (MVD) - LINK TO PHOTO GALLERY

The first of at least three 737-300's that Alas Uruguay intends to take delivery of, CX-OAA (c/n 28569/2996), arrived in Montevideo (MVD) at 19:25 local time this evening from Porto Alegre (POA) where the aircraft had been undergoing a repaint in the new carrier's colors for several weeks.  

The 737-300 will now be involved in route-proving trials, flight crew qualifying and other procedures that are necessary to complete the fourth of five phases of the airline's certification by the Dirección Nacional de Aviación Civil (Uruguayan National Civil Aviation Directorate).   

Alas Uruguay hopes to put this and other 737-300's on routes from Montevideo (MVD) to various South American cities, including the lucrative Buenos Aires Aeroparque (AEP) route.  The first route is expected to be to Asuncion (ASU) where negotiations are the most advanced. Montevideo (MVD) - Asuncion (ASU) is currently served by BQB Lineas Aereas with ATR72-500's and Amaszonas with CRJ-200's.

Link to El Pais Uruguay photo gallery:

http://www.elpais.com.uy/informacion/aterrizo-primer-avion-alasu-carrasco.html

Skyliners Daytime Photo (via Eric Trum):

http://www.skyliner-aviation.de/viewphoto.main?LC=nav2&picid=9173 

Source:        

http://www.elpais.com.uy/informacion/aterrizo-primer-avion-alasu-carrasco.html

FLEET UPDATE: Alas Uruguay's First Two 737-300's being Painted in Carrier's Colors in Porto Alegre (POA)

Alas Uruguay's first 737-36N, the former UR-GAN (c/n 28569/2996) flew from Ukraine, where it previously operated for Ukraine International Airlines, to Porto Alegre (POA) in late January to be painted in Alas Uruguay colors.

The aircraft, fitted with 136 seats, already carries the Uruguayan registration CX-OAA and will start service with Alas Uruguay flying charters in the coming months with scheduled service slated to start soon thereafter.  CX-OAA is expected to be delivered to Alas Uruguay's headquarters in Montevideo shortly.

Meanwhile, one source reports that the second 737-3RR, ex-UR-GAQ (c/n 28869/2887) is said to have arrived in Porto Alegre (POA) for painting.  It will be delivered as CX-OAB.

The airline is said to be paying a monthly lease of between US$ 80,000 - 130,000 on these two aircraft and the one (possibly more) to follow. 

Sources:

http://www.siscoma.com.ar/online/aviacion/2014/avn141225/avn-141225.html
http://www.siscoma.com.ar/online/aviacion/2015/avn150205/avn-150205.html
http://linea-ala.blogspot.com.ar/2015/01/vuelo-de-delivery-del-boeing-737-300.html
http://www.siscoma.com.ar/online/aviacion/2015/avn150212/avn-150212.html
http://www.siscoma.com.ar/online/aviacion/2015/avn150219/avn-150219.html
http://www.siscoma.com.ar/online/aviacion/2015/avn150226/avn-150226.html
   

Alas Uruguay: Continues to Organize, Receiving One 737-300 in December

Alas Uruguay, the airline being started by former PLUNA employees, continues to organize with the start-up reportedly being in the second of five steps of certification by the Uruguayan Civil Aviation Directorate (DINACIA - Direccion Nacional de Aviacion Civil e Infraestructura Aeronautica) as of October.  

The carrier is said to have leased one 134/138-seat 737-300 from Ukraine with up to three more expected from the U.S.  The first example, reportedly UR-GAN (c/n 28569/2996) and currently operating with Ukraine International Airlines, is due in Montevideo (MVD) on December 15.  Typical lease payments for this type of aircraft range from US$ 80,000 - 130,000 monthly. 

Alas plans to start with charter flights followed by scheduled services to some of the former destinations operated to by PLUNA, some of which are currently served by BQB Lineas Aereas. These would include Asuncion, Paraguay, Santiago, Chile and several Brazilian points, including Rio de Janeiro and Sao Paulo, but the "make-or-break" route for Alas will be the highly-profitable "Air Bridge" between Montevideo (MVD) and Buenos Aires Aeroparque (AEP).  Alas considers itself the successor airline to PLUNA and appears to be assuming that it will inherit the latter's route rights but some of the MVD-AEP slots have been granted to BQB, albeit on a temporary basis, while most of them have been taken over by Aerolineas Argentinas / Austral.  Taking the rights from BQB will presumably not be easy and negotiating with the Argentine authorities will be even more difficult. 

Alas' marketing strategy remains to be seen and will largely depend on the routes it operates but there has been talk of agreements with the Amadeus and SABRE global distribution systems.  

The carrier is being organized as a cooperative starting with 50 employees with eventual plans for 225 staff.  Start-up funding will come primarily from a US$ 15 million loan from the FONDES Uruguayan government development fund to be granted in five installments subject to the carrier meeting performance goals. The fund has already handed over the first installment of US$ 400,000.  The government has also declared Alas Uruguay to be of "national interest" qualifying the airline for tax exemptions.
    

Sources:

http://www.siscoma.com.ar/online/aviacion/2014/avn140731/avn-140731.html
http://www.siscoma.com.ar/online/aviacion/2014/avn141002/avn-141002.html
http://www.elobservador.com.uy/noticia/287801/alas-uruguay-arrendo-un-avion-que-llegara-el-15-de-diciembre/
http://www.elpais.com.uy/economia/gente-negocios/alas-uruguay-despegara-vuelos-charters.html
http://www.elpais.com.uy/informacion/alas-uruguay-despega-bendicion-mujica.html
http://www.elpais.com.uy/informacion/alas-uruguay-anuncio-que-empezara.html
http://www.siscoma.com.ar/online/aviacion/2014/avn141016/avn-141016.html
http://www.airfleets.net/ficheapp/plane-b737-28569.htm

Alas Uruguay receives US$ 780,000 from Uruguayan government development fund to lease 3 737-300's

The FONDES Uruguayan government development fund granted Alas Uruguay, the airline being started by former PLUNA employees, US$ 780,000 of the US$ 15 million credit line approved to assist the carrier establish a viable operation. Alas Uruguay will lease three 737-300's from Jet Trading & Leasing of the United States for US$ 65,000 each per month but needs to put down a deposit equal to three months of lease payments to initiate the transaction.

The airline is hoping to start service in January 2015 with initial destinations from Montevideo (MVD) being Buenos Aires Aeroparque (AEP), Asuncion (ASU), Santiago (SCL), Rio de Janeiro Galeao (GIG) and Sao Paulo Guarulhos (GRU) with Curitiba (CWB), Porto Alegre (POA) and Santa Cruz (VVI) being added later.

Editor's Comment:  Alas Uruguay's route plans nearly duplicate BQB's past, current and future route aspirations. Given the flights being added on many of these routes by traditional and powerful network airlines, such as TAM, it seems doubtful that one, never mind two carriers, could operate many of them profitably.

Source:

http://www.siscoma.com.ar/online/aviacion/2014/avn140710/avn-140710.html           

Alas Uruguay approved for US$ 15 million loan from FONDES Uruguayan Government Development Fund; hopes to lease 3 737-300's

The FONDES Uruguayan development fund approved in late May Alas Uruguay's application for a US$ 15 million loan that will be used to finance the lease of 3-4 737-300's by the new Uruguayan carrier.  The loan will be granted in five installments totaling US$ 3.78 million subject to the carrier meeting certain development goals with the US$ 11.22 million balance being subject to financial requirements being met. 

Soon after this, Uruguay's Aeronautical Commission approved Alas Uruguay's operational plan contingent upon the carrier meeting the above-mentioned objectives.  Should Alas Uruguay fail in this regard the FONDES would discontinue funding and the Aeronautical Commission would rescind its approval halting the carrier's startup plans.

The next step is for Alas Uruguay to apply with the Uruguayan Aviation Administration (Dirección Nacional de Aviación Civil e Infraestructura) for certification to operate the 737-300's allowing the airline to finalize its lease agreement with the lessor.       

Staff from the carrier have been writing manuals and making other preparations for the carrier's hoped-for start of service later this year as a charter airline followed by scheduled service from Montevideo to Asuncion, Santiago, Rio de Janeiro, Sao Paulo, and especially Buenos Aires Aeroparque with up to 35 weekly frequencies which was PLUNA's most profitable route. Routes to be added later would include Cordoba, Curitiba, Porto Alegre, and Santa Cruz de la Sierra.     

With many of the airline's crews having flown 737-200's and a sole 737-300 while at PLUNA, the training process is simpler than if they had had no previous experience with the types.   

Editor's Note:  Alas Uruguay's plans call for it to compete head on with BQB Lineas Aereas on many routes but it seems doubtful that there is enough traffic on these city pairs to support two carriers, which looks especially doubtful for Alas Uruguay going up against the Buquebus Travel Group's financial strength.  Also, getting approval for anywhere near 35 weekly frequencies to Buenos Aires will be impossible given the Argentine government's protectionism of Aerolineas Argentinas.          

Sources:

http://www.siscoma.com.ar/online/aviacion/2014/avn140508/avn-140508.html
http://www.siscoma.com.ar/online/aviacion/2014/avn140529/avn-140529.html
http://aeronavescx.blogspot.com.ar/2014/06/junta-aeronautica-aprobo-plan-de.html
http://www.siscoma.com.ar/online/aviacion/2014/avn140605/avn-140605.html
http://www.siscoma.com.ar/online/aviacion/2014/avn140626/avn-140626.html

Alas Uruguay Continues Plans to Start Service with 3 737-300's in 2014

Alas Uruguay is continuing with its plans to start service with three leased 737-300's this year.

Senior officials of the airline being formed by a group of former PLUNA employees met with the Uruguayan senate on 19Mar14 seeking support for the carrier's business plan.  Most of the plan was held in confidence but the Uruguayan newspaper El Observador was able to learn some of the details:    

Keys to the start of service are:

1) Approval of a pending credit from the FONDES (Uruguayan government development fund) of US$ 15 million. 

2) Granting of desirable slots on the highly-profitable Montevideo (MVD) - Buenos Aires Aeroparque (AEP) route.

This last condition is highly doubtful, especially because the airline is seeking two early morning slots, one at mid-day, and two more in the evening, all of which are currently held either by Aerolineas Argentinas or BQB Lineas Aereas. The Argentine government is likely to prioritize the interests of the state-owned Argentine carrier and not cede any slots to Alas Uruguay beyond those currently operated by BQB, which is also a Uruguayan airline.  

BQB Lineas Aereas is part of a larger transportation group that includes the Buquebus ferry lines and controls 75% of the total available space for passengers traveling between Argentina and Uruguay by air or sea.  Alas Uruguay senior officials clearly expect that BQB will give up some of its better slots between MVD-AEP but the latter only operates 2x/daily on the route so it has little, if anything, to give to the newly-forming airline.

Beyond the Montevideo - Buenos Aires "Air Bridge", Alas Uruguay is planning a "hub-and-spoke" system similar to the network that PLUNA had assembled at the time of its demise, using Montevideo (MVD) as a hub connecting to different points in Argentina, Brazil, Chile and Paraguay. The carrier aspires to operate as something of an LCC with lower wages than average for the region and 25% of salaries going towards helping capitalize the airline. 

Alas Uruguay's business plan calls for the airline to carry 560,000 passengers in its first year with a 12% increase to 627,000 in its second year.  Revenue would grow 24% in its second year - faster than the growth in passengers -suggesting a yield increase.  Presumably the carrier would offer many discount airfares in its first year to attract business with fewer discounts in its second year when it is better-known.  

A total of 70 weekly flights would be operated.  The airline forecasts first-year operating losses of US$ 2.84 million but second-year profits of US$ 13.49 million.  Alas Uruguay's management further claims a financial benefit to Uruguay of US$ 79 million per year with US$ 60 million coming from a forecast of 100,000 new tourists annually and the rest coming from savings to the government of the unemployment insurance it is currently paying the employees, new tax collections, and the value of products and services that the carrier would consume.         

Sources:

www.flightstats.com
http://www.elobservador.com.uy/noticia/274352/alas-uruguay-en-el-parlamento-con-la-mano-en-el-corazon-pedimos-que-nos-ayuden/
http://www.elobservador.com.uy/noticia/274542/alas-uruguay-se-propone-pelear-por-el-mercado-en-manos-de-lopez-mena-/

FLEET UPDATE: Seven ex-PLUNA CRJ-900's to be Sold outside Uruguay

Former PLUNA CRJ-900, CX-CRG (c/n 15209) also flew with AeroVip and is one of the ex-PLUNA aircraft to be sold.  (Phil Perry Photo)

The seven ex-PLUNA CRJ-900's that have been out of service in Montevideo (MVD) since PLUNA's shutdown in July 2012 (the carrier had thirteen CRJ-900's in all but the other six aircraft were leased and returned) will be put up for sale soon because the airline being formed to replace PLUNA, Alas Uruguayas, is no longer interested in the aircraft and is now seeking to lease 737-300's.   

Between 30 and 40 technicians and maintenance staff have kept the CRJ-900's airworthy for the last 20 months, doing routine maintenance with the aircraft being flown occasionally to test all systems.  Keeping the planes in fly-away condition has cost US$ 420,000 per month which has been paid by the trust set up to hold and oversee the former airline's assets. 

There have been at least three parties interested in purchasing or brokering the CRJ-900's in the last year, including one that offered US$ 48 million for four of the aircraft, but the trust was different from ordinary trusts in that it was set up by a special law passed by the Uruguayan congress that separated the CRJ-900's from the assets accessible to creditors under the airline's bankruptcy proceedings. 

However, that law was declared unconstitutional by the Uruguayan supreme court in November 2013 as the court considered it to violate creditors' rights.
On 09Jan14, the bankruptcy court placed the aircraft back in the group of assets to be used to settle creditor claims.  Creditors to the former PLUNA include ANCAP, Uruguay's national oil company, for unpaid fuel bills and the hundreds, if not thousands of passengers that were left holding worthless tickets when the carrier shut down on July 6, 2012.   

The loan to purchase the CRJ-900's has not been paid off, which would in most bankruptcy cases probably mean that proceeds from the sale of the aircraft would go to pay the outstanding debt, but the debt on the aircraft was guaranteed by the Uruguayan government which has been making US$ 8.8 million installment payments every six months to ScotiaBank of Canada and apparently will continue to be responsible for the overall US$ 203 million cost of the seven aircraft.     

The CRJ-900's are expected to sell for between US$ 12 million and US$ 16 million each.

The seven aircraft are:

CX-CRA (c/n 15165)
CX-CRB (c/n 15169)
CX-CRC (c/n 15175)
CX-CRD (c/n 15180)
CX-CRE (c/n 15185)
CX-CRF (c/n 15204)
CX-CRG (c/n 15209)

Sources:

http://www.elobservador.com.uy/noticia/271870/los-siete-aviones-de-la-ex-pluna-a-punto-de-venderse-por-licitacion-/
http://www.siscoma.com.ar/online/aviacion/2014/avn140220/avn-140220.html
http://www.siscoma.com.ar/online/aviacion/2014/avn140213/avn-140213.html
http://www.airfleets.net/flottecie/Pluna-stored-crj.htm
http://www.airfleets.net/ficheapp/plane-crj-15209.htm

PLUNA Replacement Airline "Alas Uruguay" Looking More Doubtful

ex-PLUNA CRJ-900's unlikely to fly in Alas Uruguay colors (Phil Perry Photo)

It is looking increasingly doubtful that the proposed PLUNA replacement airline, Alas Uruguay, will be a viable proposition.  

TRUST DECLARED UNCONSTITUTIONAL BY URUGUAYAN SUPREME JUDICIAL COURT

The trust that was created by a law passed by the Uruguayan congress in the months following PLUNA's July 2012 shutdown was declared unconstitutional by Uruguay's Supreme Judicial Court in November 2013.  One of the problems with the law cited by the court is that it removed the seven company-owned PLUNA CRJ-900's from the pool of assets that creditors could access through the airline's bankruptcy liquidation proceedings.  This violated creditors' property rights under Uruguayan law.

INCREASINGLY UNLIKELY THAT ALAS URUGUAY WILL FLY THE EX-PLUNA CRJ-900's

The implications of the trust being declared void is that the Uruguayan government's offer of the aircraft to the former PLUNA employees who were forming Alas Uruguay under favorable terms will no longer be valid.  These terms included a three-year grace period before Alas Uruguay would have to make any payments on the aircraft.  It is doubtful that the creditors would extend such generous terms on the aircraft.

FINANCIAL IMPLICATIONS FOR URUGUAYAN GOVERNMENT

There are also significant financial implications for the Uruguayan government in that it is responsible to ScotiaBank for the debt on the aircraft and was counting on payments from Alas Uruguay to cover some of the costs of the loan payments.  But with the CRJ-900's to be included in the pool of assets that will be used to pay off creditors, this money will be lost.  The government has already paid US$ 26 million in three installment payments but it is liable for another US$ 100 million in guarantees for the aircraft.  

The government is an unsecured creditor behind other creditors, such as suppliers, which have absorbed costs maintaining the aircraft flight-ready and the crews current, the ANCAP national fuel company which PLUNA owed a lot of money to, and PLUNA passengers who hold tickets that they were not able to use due to the carrier's shutdown.     

US$ 15 MILLION "FONDES" FUNDS HELD UP BY URUGUAYAN GOVERNMENT

With the Supreme Judicial Court ruling being imminent the Uruguayan government held up the handover of US$ 15 million "FONDES" (business development fund) funds that were slated for Alas Uruguay.  The government wanted to see the SJC ruling and its implications before granting the money.

The funds will reportedly be given to Alas Uruguay and the latest news is that the carrier might use them to lease three 737-300's in order to start service soon rather than absorb more delays while the situation with the CRJ-900's is sorted out. 

Sources:

www.elobservador.com.uy/noticia/268694/en-una-semana-aviones-de-pluna-pasaran-formalmente-al-concurso-/

www.elobservador.com.uy/noticia/264660/moreira-con-estos-hechos-en-otra-epoca-los-ministros-renunciaban-/

www.elobservador.com.uy/noticia/264062/deudas-del-estado-se-multiplican-si-la-corte-hace-caer-ley-de-pluna/

www.siscoma.com.ar/online/aviacion/2013/avn131219/avn-131219.html

www.siscoma.com.ar/online/aviacion/2013/avn131212/avn-131212.html

www.siscoma.com.ar/online/aviacion/2013/avn131128/avn-131128.html

www.siscoma.com.ar/online/aviacion/2013/avn131107/avn-131107.html

www.siscoma.com.ar/online/aviacion/2013/avn131121/avn-131121.html

www.siscoma.com.ar/online/aviacion/2013/avn131114/avn-131114.html

www.siscoma.com.ar/online/aviacion/2013/avn131017/avn-131017.html

      

                

Alas-U - Latest Developments on PLUNA Replacement Airline

Alas-U, the airline being formed by former PLUNA workers, recently came to an agreement to purchase three of the former flag carrier's CRJ-900's that are owned by the trust formed by the Uruguayan government after the collapse of PLUNA.  

The Uruguayan government guaranteed the loans given to purchase the aircraft by ScotiaBank.  It has given Alas-U a two-year grace period during which the government will continue making the payments but after that the airline will need to pay US$ 47 million over a ten-year period.   

The Fondo de Desarrollo (FONDES) development fund approved the US$ 15 million loan to Alas-U that had been pending for months and will start to hand over the cash in installments shortly.  The three CRJ-900's will act as the guarantee for the loan and will be subject to being returned to the trust should Alas-U fail to make the loan payments.  An independent consultant will be contracted to maintain the government informed of developments and monitor the airline's adherence to the business plan presented to the FONDES.        

The airline has started the process of getting its operating certificate from the DINACIA (national civil aviation regulatory body) which the agency has 180 days to complete.  Unless the licensing is speeded up, Alas-U will not be able to start service until March 2014 when the peak summer season for visitors to Uruguay will be finished.  

This is very disappointing to the Uruguayan tourism industry as it was hoped that the airline would be up-and-running providing seats to bring in tourists and help keep airfares in check.  This will be the second summer without a substantial presence by a Uruguayan airline in the market although BQB Lineas Aereas has helped fill the gap.

Source: http://www.elobservador.com.uy/noticia/260100/otra-temporada-
           turistica-sin-aerolinea-uruguaya/