I spend about 10 years in the airline industry, and I am
watching the takeover of Aerolineas Argentina
with interest. Here are some of the things I have been able to find out:
The
airline has about 65 airplanes only 6 are owned the rest are leased. Only
about half their fleet is in service. They
employ about 9,000 people. Total debt is around 900 million very,
very high. [/list]
This looks like a complete basket case to me. They are operating
only about half the fleet (some very expensive pieces of technology are sitting
on the ground producing nothing). I have to assume there just isn’t a market to
support this number of aircraft or they would be in the air.
If this is the case the airline only needs 30-35 planes. The
rule of thumb in the airline business is that you need roughly 100 employees
per aircraft. That means they have three times the number of employees they
need.
Strictly from a business standpoint it’s obvious that if you
wanted to operate an airline here you would be much better off shutting this
one down and starting a fresh with the right number of aircraft and employees,
and not being burdened with debts of this magnitude.
I understand this will be voted on by Congress here.
Hopefully they will continue to show some back-bone and vote this down.
My guess is the plan is to have the taxpayers assume
responsibility for the debts and later turnover the ownership to presidential
cronies for a song. However, I don’t see
how this could ever stand as a private company with the degree of overcapacity
and overstaffing that is apparent today.
watching the takeover of Aerolineas Argentina
with interest. Here are some of the things I have been able to find out:
The
airline has about 65 airplanes only 6 are owned the rest are leased. Only
about half their fleet is in service. They
employ about 9,000 people. Total debt is around 900 million very,
very high. [/list]
This looks like a complete basket case to me. They are operating
only about half the fleet (some very expensive pieces of technology are sitting
on the ground producing nothing). I have to assume there just isn’t a market to
support this number of aircraft or they would be in the air.
If this is the case the airline only needs 30-35 planes. The
rule of thumb in the airline business is that you need roughly 100 employees
per aircraft. That means they have three times the number of employees they
need.
Strictly from a business standpoint it’s obvious that if you
wanted to operate an airline here you would be much better off shutting this
one down and starting a fresh with the right number of aircraft and employees,
and not being burdened with debts of this magnitude.
I understand this will be voted on by Congress here.
Hopefully they will continue to show some back-bone and vote this down.
My guess is the plan is to have the taxpayers assume
responsibility for the debts and later turnover the ownership to presidential
cronies for a song. However, I don’t see
how this could ever stand as a private company with the degree of overcapacity
and overstaffing that is apparent today.