Aerolineas Argentinas ! AR ! ARG

Aerolineas seeks to lease
Aerolineas Argentinas is looking to lease several Boeing 737-800s to complement the 12 737-700s it has already acquired.

The carrier's new chief commercial officer, Juan Pablo Lafosse, tells ATI during the 2009 ALTA Airline Leaders Forum that Aerolineas aims to complete the renewal of its entire 737 fleet by the end of next year.

Aerolineas early this year acquired 12 737-700s to replace its fleet of 737-200s. Lafosse says the carrier is now looking to lease 737-800s to replace the carrier's 737-500s.

He says Aerolineas has about 12 737-500s but only requires "about six" 737-800s because of significantly higher utilisation rates on new generation 737s. He says Aerolineas has been utilising its 737-700s on average 11 to 12 hours per day compared to only four hours per day for its 737-200s.

Lafosse says Aerolineas aims to receive all six 737-800s next year, allowing it to completely phase out its 737-500 fleet by the end of 2010. He says the carrier is now entertaining proposals on a mix of new and used aircraft.

He adds Aerolineas currently only has two 737-200s in service, compared to about 10 737-200s only three months ago, and will operate its last 737-200 flight on 15 November. The carrier has been able to quickly phase out its 737-200s as it has been taking 737-700s over the last few months at a breakneck pace.

Lafosse says Aerolineas already has six 737-700s in service and the seventh is now in Argentina. He says the last five 737-700s Aerolineas has committed to will all be delivered by February.

Of the 12 737-700s Aerolineas agreed to acquire early this year two have been purchased and 10 are being leased. Originally the aircraft were going to be delivered at a rate of only one per month but Lafosse says "we're speeding that up".

He says the more rapid planned phase-out of the 737-200s has been "quite complex" from a pilot training standpoint. But Aerolineas has been able to quickly train its 737-500 pilots for the 737-700 and its 737-200 pilots initially for the 737-500.

Aerolineas has been mainly using its 737-700s to replace 737-500s on its medium-haul international routes, freeing up the 737-500s to replace 737-200s domestically. Lafosse says 737-700s are now operating from Buenos Aires to Bogota, Lima, Sao Paulo, Rio de Janeiro and Santiago. He says the carrier also plans to use 737-700s to resume services to La Paz in Bolivia and Cuzco in Peru in the second half of next year.

In the case of Bogota he says the 737-700 has allowed Aerolineas to begin serving the Colombian capital on a non-stop basis. Previously it served Bogota with a stop in Lima. Aerolineas still serves Lima daily but now also has four weekly non-stop flights to Bogota.

Lafosse says the introduction of Boeing 737-700s has already driven a significant improvement in Aerolineas' overall operation. Lafosse says the carrier has begun overhauling its operations as part of a "transformation plan" that includes "the whole company - maintenance, operations and revenue management".

He adds on-time performance has improved from 50% to 80% since the first 737-700 was placed into service. "Our target is to get to 88% to 90% by the end of the year. It's a huge change," Lafosse says.

Aerolineas could lease six A330s and seven A340s

Aerolineas Argentinas is preparing to lease 13 Airbus widebodies should it fail to conclude a deal to purchase 13 A330/A340s originally ordered by former owner Marsans.

The Argentinean government has been talking to Marsans and Airbus for several months about inheriting part of the order placed by Marsans in November 2008 for 61 Airbus widebodies. Aerolineas new chief commercial officer Juan Pablo Lafosse told ATI and Flightglobal during the 2009 ALTA Airline Leadership Forum these negotiations continue but the airline also has begun evaluating leasing 13 A330/A340s as an alternative.

Lafosse says Aerolineas has an urgent requirement for six A330-300s and seven A340-600s as it is planning to rebuild its international network to support a new transformation plan. He adds the carrier wants to begin adding the aircraft in February, and take all 13 aircraft within 14 to 16 months.

Lafosse says Aerolineas will lease the aircraft if a deal with Marsans, which had ordered the aircraft with the intention of spreading them around Aerolineas and its other airline subsidiaries, cannot be forged. He says Aerolineas is now looking at the lease option and evaluating whether leases may financially be a better alternative than inheriting part of the Marsans order.

"Everyone thinks it [inheriting part of the Marsans order] is the most diplomatic solution and we want the airplanes. But maybe now is not the right time to buy," Lafosse says. "We're not sure it's now is the right time to buy."

He explains third-parties have agreed finance the 13 aircraft if a deal with Marsans can be concluded but low lease rates now make leasing a potentially more attractive option. "There are so many aircraft on the market and they are so cheap," Lafosse says, adding he believes lease rates for A330s have come down 50% over the last two years and are now about $350,000 per month.

Lafosse says the Argentinean government, which fought with Marsans over the value of Aerolineas when it decided to re-nationalise the carrier last year, is not legally required to take any aircraft from the Marsans order. But he acknowledges settling the government's ongoing dispute with Marsans by agreeing to takeover part of the order would be an ideal compromise.

It appeared a deal was close to finally being completed last month but instead negotiations, which have been ongoing for several months, continue. "It's not complete for any side. We're still in negotiations," Lafosse says.

He adds Aerolineas had been hoping to take the first aircraft from the Marsans settlement in November but that is no longer possible. He says three of the A330s from the part of the order earmarked for Aerolineas have already been built and are ready to be delivered if a deal can be concluded. "It's quite political. The government drives it but it is based on our recommendations," Lafosse says.

The carrier's recommendation specifies six A330-300s and seven A340-600s. Lafosse says Aerolineas plans to use the new aircraft mainly to launch new routes and supplement its fleet of six A340s. He says the carrier's three 747s will be phased out but nearly all 13 aircraft are considered growth aircraft as the utilisation rate on Aerolineas' 747s are currently very low.

Aerolineas has scaled back its long-haul network considerably over the last several years. Outside of South America the carrier now only serves Miami, Madrid, Barcelona and Rome.

Lafosse says Aerolneas' new business plan calls for the resumption of services to New York, Paris, London, Johannesburg, Mexico City, Cancun, Havana and Puerto Plata. He says Aerolineas also plans to launch service to Orlando.

Lafosse estimates the new routes should be launched by mid 2011 but South Africa is particularly a priority and Aerolineas aims to resume serving the country prior to the start of the 2010 World Cup.

Lafosse says Aerolineas also plans to use the additional A330s and A340s to add capacity to Barcelona, Madrid and Rome. He says its Barcelona service will increase to daily from thrice weekly and its Rome service will also "probably" increase from thrice weekly to daily. Aerolineas already serves Madrid daily but Lafosse says the carrier would like to add a second flight for at least some days of the week.

Aerolineas eyes 15 787s with near-term delivery slots
By Brendan Sobie



Aerolineas Argentinas is considering acquiring 15 Boeing 787s with deliveries beginning as early as 2011 as part of a new tender which also seeks bids for up to 40 narrowbody aircraft.
The carrier's chief commercial officer, Juan Pablo Lafosse, reveals Aerolineas "is in the process of issuing requests for proposals" for new aircraft that meet narrowbody and widebody requirements outlined in its recently revised fleet plan. He says the airline, which now operates five Airbus A340s and two 747s, is considering 787s and A330s but not A350s for the widebody requirement.
For narrowbodies, Aerolineas is considering Boeing 737NGs and A320 family aircraft to supplement the 20 E-190s ordered last year for its domestic unit Austral. Aerolineas and Austral currently have in service 12 737-700s, about 12 737-500s and about 17 MD-80s.
Lafosse says Aerolineas' new fleet plan, which is a key component in the long-ailing carrier's transformation plan, envisions the airline operating "three or four years from now" a fleet of 60 narrowbodies and 15 widebodies. The 60 figure includes the 20 E-190s which Lafosse says are now scheduled for delivery from July 2010 through July 2011.
Aerolineas has been looking for new widebodies since the carrier was renationalised in late 2008. For several months last year the carrier was considering taking over part of the 61-aircraft Airbus widebody order placed in 2008 by former owner Marsans. In October 2009 Lafosse told ATI and Flightglobal that the Argentinean government was negotiating with Marsans and Airbus over inheriting 13 A330/A340s from this order, but that as an alternative the carrier was also looking at leasing six A330s and seven A340s.
Over the last couple of months, however, efforts to take over part of the Marsans order have since been dropped altogether. Meanwhile, Aerolineas also has widened its widebody evaluation to consider the 787.

Lafosse tells ATI and Flightglobal there are two scenarios now under consideration. The first envisions transitioning to a widebody fleet consisting entirely of 787 family aircraft but also acquiring at least two additional A330/A340s to support near-term expansion until 787s are available. Lafosse is confident Aerolineas could "transition to a 787 fleet starting one and a half or two years from now", claiming that "there are positions from lessors" in this timeframe.
The second scenario envisions replacing all of Aerolineas' seven active widebodies with new A330/A340s as well as acquiring eight additional A330/A340s for growth. Lafosse says Aerolineas is "not yet" considering A350s.
Under both widebody scenarios Aerolineas seeks two aircraft in the second half of this year, which Lafosse says will be used to launch service to Mexico. In 2011 the carrier's fleet plan has another two growth aircraft, which will be used to launch services to New York and London, as well as the first batch of replacement aircraft. In addition to the five A340s and two 747s currently operating to Miami, Madrid, Barcelona, Rome, Auckland and Sydney, Aerolineas has one A340 and one 747 that are not in active service.
On the narrowbody side, Lafosse in October said Aerolineas was looking at leasing 737-800s to replace its 737-500 fleet. But he says the narrowbody search has now been widened to include the A320.
He says one scenario envisions a 40-aircraft all-A320 family narrowbody fleet at Aerolineas. This would involve phasing out the 12 737-700s which have been acquired over the last year.
The second narrowbody scenario envisions acquiring 28 additional 737NGs to go along side the 12 737-700s. Lafosse says of the 40 aircraft envisioned for the Aerolineas narrowbody fleet by 2014, roughly two-thirds would be 737-700 size and one-third 737-800 size. All the narrowbody scenarios envisions Austral operating 20 E-190s as currently planned.
Lafosse says in addition to renewing the entire narrowbody fleet at Aerolineas and Austral, significant growth is envisioned as part of the new fleet plan. He says this is designed to support another component of Aerolineas' new business plan, which envisions significant capacity growth across the carrier's domestic and regional international networks.
Lafosse says the narrowbody and widebody requests for proposals are being issued to leasing companies as well as Airbus and Boeing. "It depends on who will be able to give us a better deal. We're quite sure one or two lessors will be included in the [project] but it depends on what is the better offer," he says.

Mr Lafosse says Aerolineas, as part of a second phase in its widebody
fleet renewal plan, aims to acquire seven A330-200s with increased
maximum take-off weights for delivery in 2015 and 2016. These aircraft
are intended for growth and to replace some of the carrier’s seven
A340-300s. But Aerolineas will have to be patient, as the increased
maximum take-off weight option on the A330-200 was only launched in
Jul-2012 for deliveries starting in 2015.

The new 242t A330-200 can fly 350nm further than original 238t A330-200, according to Airbus
product specifications. This extended range is important for
Aerolineas, as the carrier believes it enables non-stop flights from Buenos Aires to Madrid, Barcelona and Rome
without payload restrictions. The carrier expects it will only be able
to use the 238t A330-200s which it will take during 2013 on its shorter
A340 routes to Bogota, Cancun, Caracas and Miami.