Avianca

VECA Airlines starts flights to Costa Rica

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VECA Airlines operates two Airbus A-319s.
VECA Airlines operates two Airbus A-319s.

SAN JOSE, Costa Rica–Salvadoran Low Cost Carrier (LCC) VECA Airlines landed at Juan Santamaria International Airport last February 27th. The airline will operate three times a week a flight from Guatemala City via San Salvador with an Airbus A-319 for 144 passengers in one single class. The airline is expected to offer excellent fares and compete with both Avianca and COPA Airlines. In 2009 the Colombian airline Avianca purchased GRUPO TACA and for a while the new airline operated as AviancaTACA but in 2013 the airline changed its name again to just Avianca. The Central American communities in the United States and Canada lost the emotional connection they used to have with the Salvadorian flag carrier that started in 1931 and now expect VECA Airlines to fill the void. Non official versions insist that VECA Airlines will start flights to Baltimore, New York, Houston and Los Angeles by the end of 2015 or beginning of 2016. The airline’s web site http://www.vecaairlines.com shows future services to Panama City from San Salvador.

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Avianca Holdings 2014 net profit falls 52% to $120.5 million

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The airline operates four Boeing 787-8.
The airline operates four Boeing 787-8.

BOGOTA, Colombia–Avianca Holdings posted a full-year net profit of $120.5 million in 2014, down 51.6% from a net profit of $248.8 million in 2013. The Panama City-registered carrier reported full-year operating revenues of $4.7 billion, up 2% year-over-year (YOY), as expenses came to $4.42 billion, up 4.6% YOY. The company’s full-year operating profit was $284.6 million, down 26.1% YOY from 2013’s $384.9 million operating income.Avianca’s cargo revenue performance was strong in 2014, totaling $834.2 million, up 11.6% YOY. During the year, Avianca acquired a stake in Mexican airfreight carrier AeroUnion and entered into a commercial agreement with Etihad, “creating a stronger cargo operation and more connectivity from Los Angeles via Mexico, while also improving cargo connectivity to Europe, from Milan and Amsterdam to Bogota,” Avianca said. Avianca’s passenger traffic grew 4.5% YOY to 32.6 billion RPKs on a 5.9% rise in capacity to 41.1 billion ASKs, finishing 2014 with a full-year load factor of 79.4%, down 1.1 points from 2013. The company carried 26.2 million passengers in 2014, up 6.6% YOY. CASK for the full-year decreased 1.5% YOY to 10.7 cents, partly attributable to the drop in fuel prices during the 2014 fourth quarter, Avianca said. Excluding special items, Avianca reported an adjusted net income of $129.1 million for the year. The company said its 2014 EBITDAR (earnings before interest, taxes, depreciation, amortization and rents) totaled $786.7 million, down 5% YOY; Avianca’s full-year EBITDAR margin was 16.7%, down 1.3 points from 2013. In 2014, Avianca took delivery of 32 new aircraft, including 14 Airbus A-320 family aircraft, 10 ATR 72-600 aircraft for regional flight deployments, four Boeing 787-8 Dreamliners, two A-330s and two A-330 freighters. All 10 of the company’s Fokker 50s were phased out and sold; the company’s entire ATR 42 fleet was retired as well. As of Dec. 31, 2014, the company’s consolidated operating fleet comprised 181 aircraft. Avianca Holdings, created in 2009, operates Latin American airlines Avianca (based in Colombia), TACA (based in El Salvador), Costa Rica’s LACSA, Guatemala’s Aviateca, Ecuador’s Aerogal, plus Avianca Brasil, TACA de Honduras and TACAPeru.

Massive Layoffs in Avianca

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BOGOTA, Colombia–On November 14th up to 1800 employees systemwide were laid off at Avianca Holdings. The airline consortium owner of Avianca, TACA, LACSA, TACAPeru, Aerolineas Galapagos and TAMPA Cargo is suffering as more competition enters Colombia, Central America and the airline has not been able to recover up to 200 million dollars from Venezuela. Avianca is the second oldest airline in the world, created in 1919 in Colombia and an icon in Latin America. The merger with the TACA Group in 2009 created for a while the biggest airline in the region. Central America and the north of South America are now excellent revenue producers for U.S. carriers and Latin American airlines. For 2015 Southwest Airlines will open its first Latin American city: San Jose in Costa Rica and Spirit Airlines CEO Ben Baldanza will develop by May a new Central American hub in Houston International Airport to compete against United Airlines. Salvadorian start-up VECA Airlines is expected to start flights in February 2015 with two Airbus A-319s to Central America and most likely Fort Lauderdale, Los Angeles and Baltimore. Also the Colombian LCC Viva Colombia has announced its interest to operate to three cities in Florida. Pressure on Avianca has build up and layoffs were needed to lower the operational costs. Rumors are that the airline will have a second wave of layoffs in February 2015.

Turbulent air ahead for Avianca Airlines.
Turbulent air ahead for Avianca Airlines.

Avianca 3Q net profit down 7.6%, passengers up 7.5%

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BOGOTA, Colombia–Panama City-registered Avianca Holdings reported third-quarter net profits of $33.2 million, down 7.6% from $35.9 million posted in the year-ago period. Operating revenues were $1.23 billion, up 3.9% year-over-year, as expenses rose 10.2% to $1.16 billion. Resulting operating income for the quarter came to $70.3 million, down 46.9% from $132.2 million in the September 2013 quarter. Avianca attributed the results to “redeployed capacity (ASKs) as well as the strong demand observed in the Colombian domestic market and … the entry into operation of the Bogota-London route.” Avianca’s third-quarter traffic grew 5.3% year-over-year to 8.7 billion RPKs on a 6.1% rise in capacity to 10.7 billion ASKs, creating a quarterly load factor of 81.3%, down 0.7 point from the 2013 third quarter. The company carried 6.9 million passengers during the quarter, up 7.5% from the 6.4 million passengers transported in the third quarter of 2013. Yield dropped 0.8% year-over-year to 11.9 cents. CASK excluding-fuel was up 5.8% year-over-year to 7.5 cents.nThird-quarter EBITDAR fell 14.8% year-over-year to $202.5 million. In the company’s quarterly results analysis, Avianca Holdings CEO Fabio Villegas Ramirez said, “Our cargo traffic expressed in RTKs grew 27% … resulting in an improvement of 600 basis points in load factor when compared to the third quarter of 2013,” Villegas said. “In addition, we have made further progress … with the completion of the acquisition of a stake of Aerounion in Mexico and the new commercial agreement with Etihad … which enables the company to improve its inbound cargo operation from Los Angeles via Mexico as well as enhancing connectivity to Europe.” On October 20th, Avianca Cargo and Etihad Cargo announced a commercial partnership agreement involving the deployment of freighter flights from Avianca’s Bogotá, Colombia, hub at El Dorado International Airport to Milan’s Malpensa Airport and Amsterdam’s Schiphol Airport. The twice-a-week service commenced operations November 12th. During the quarter, Avianca took delivery of 10 new aircraft: two Airbus A321s, two A320s and two A319s, plus four ATR-72s slotted to operate on the company’s domestic Colombian and Central American routes. Two ATR-42s were taken out of service. As of September 30th, Avianca’s fleet comprised 180 aircraft—165 of which are currently operational—including: 58 A320s (27 on operating lease); 36 A319s (17 on operating lease); 12 Embraer E-190s (two on operating lease); 11 ATR-72s; 11 A330s (10 on operating lease); 10 A318s (all on operating lease); 10 Cessna Grand Caravans; nine ATR-42s (five on operating lease); eight A-321s (six on operating lease); five A330 freighters; five Fokker 100s; three Boeing 767 freighters (one on operating lease) and two Fokker 50s.

Avianca 3Q net profits are down.
Avianca’s 3Q in 2014 net profits are down.

New Airlines and Flights to Costa Rica

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SAN JOSE, Costa Rica–On July 12th a complete article in LA NACION, Costa Rica’s main newspaper informed of the new flights and airlines that will start operations to Costa Rica.  On August 16th Avianca Airlines Costa Rican division under the name of LACSA will start flights from San Jose to Santiago, Chile via Bogota and from San Jose to Rio de Janeiro, Brazil always via ElDorado International Airport at the Colombian capital.  Also in August Cubana Airlines (the flag carrier of Cuba) will reinstate flights between Havana and San Jose. The airline used to operate the routes some years ago until it code shared it with TACA. Last year TACA suspended the route linking Cuba with Costa Rica. By November 1st the American carrier JetBlue Airways will open Boston-Liberia flights. For the end of the year the Civil Aviation of Costa Rica (DGAC) will have the final permits of the certification process of Air Costa Rica (Tica Air International) a new Costa Rican airline. The airline plans to start flights to Miami, Managua, Panama and San Andres Island. A second phase would include Quito, Guayaquil and Havana and a third phase would include New York and Los Angeles, routes once operated by LACSA. A second Costa Rican carrier, TICOS AIR has not been able to move forward in their certification process explained Alvaro Vargas, the director of the aviation department. Also Salvadorian start-up VECA Airlines is expected to obtain final permits to operate San Salvad0r-San Jose run. Vargas also mentioned Brazilian airline AZUL Linhas Aereas has been interested in learning about permit processes. Other airlines that have been metioned as interested in Costa Rica include Southwest Airlines, Alaska Airlines, Allegiant, Eastern Airlines, TAME of Ecuador and CONVIASA of Venezuela.

Cubana Airlines will start Havana-San Jose flights in August.
Cubana Airlines will start Havana-San Jose flights in August.

VECA Airlines soon to Fly

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SAN SALVADOR, El Salvador–VECA Airlines (Vuelos Economicos de Centro America) the new start-up airline and El Salvador’s  flag carrier established in late 2013 in San Salvador, El Salvador is close to start its international operations. The main airline hub is located in San Salvador at Monseñor Óscar Arnulfo Romero International Airport (formerly Comalapa International Airport). The airline is expected to commence service in June 2014 with regional service to major cities in Central America. VECA Airlines is expected to start their services with two Airbus A-319 leased from lessor International Lease Finance Corporation (ILFC). The first of these, a former Cyprus Airways aircraft, has already been delivered to the carrier, while its sistership is being prepared in Miami, Florida ahead of its official handover to the start-up. Both aircraft will be configured in a single-class, 144-seat economy class arrangement. The start-up intends to bring competition into the Central American market following the recent merger of Avianca and TACA Airlines. Several former TACA Airlines employees work now at VECA Airlines, the new runner up as the Salvadorian major airline after the absorption of TACA Airlines by the Colombian flag carrier. It is unclear if VECA Airlines will expand it’s “Wings” beyong the Central American countries but Salvadorian and Nicaraguan authorities hope the airline would open flights to Los Angeles, San Francisco, Houston, New York and Washington-DC. VECA Airlines will operate to Guatemala City, San Pedro-Sula, Managua, Panama City and San Jose, Costa Rica. The Juan Santamaria International Airport will be VECA Airlines secondary airport.

VECA Airlines will start operations in June from El Salvador International Airport.
VECA Airlines will start operations in June from El Salvador International Airport.

Air Canada suspends Caracas

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CARACAS, Venezuela–Air Canada says it has suspended its flights to and from Venezuela due to civil unrest. In a statement posted on its website Monday, the airline says it can no longer ensure the safety of its operation in Venezuela, which has been roiled by daily street protests over crime and a deteriorating economy for more than a month. The airline’s last flight left Caracas on Sunday. It is offering refunds to those who have purchased tickets for flights after that. Foreign airlines have struggled under a $3.3 billion debt owed by the Venezuelan government. President Nicolas Maduro said Friday any airline that reduced or suspended flights in and out of Venezuela would face severe measures. He said any airline that leaves won’t be allowed back while he is in power. Avianca will cancel flights bewteen San Jose, Costa Rica and Caracas by April 7th. Also the Colombian flag carrier will reduce frequencies between Bogota and Lima and the Venezuelan capital.

Air Canada has suspended flights to Caracas, Venezuela.
Air Canada has suspended flights to Caracas, Venezuela.