Aerolineas’ new CEO wants to keep the Embraer jets

The government of liberal President Mauricio Macri has had a clear goal for Argentina’s aviation sector over the past four years: deregulation. Among other things, it has cut limits on ticket prices, granted new rights for hundreds of routes and thus made it possible for low-cost airlines such as Flybondi and Norwegian Air Argentina to take off. Meanwhile, the state airline Aerolíneas Argentinas was supposed to become more competitive so that one day it could operate without subsidies.

But Macri’s term of office ended in December 2019 and left-wing politician Alberto Fernández took over as president. In the course of the change of political power, Aerolíneas Argentinas’ boss Luis Malvido also resigned and was replaced by Pablo Ceriani. For him it is a return, as he was already responsible for finance between 2009 and 2015, he joined right after the airline’s re-nationalization. Ceriani now comments on the state of the airline and his plans.

Accusations against predecessors

In an interview with newspaper Pagina 12, Ceriani first goes hard into court with his predecessors during the Macri government. He accuses them, among other things, of having withdrawn capital from Aerolíneas Argentinas, of having pushed the company into a much deeper financial deficit, of having neglected aircraft maintenance, and even of having unnecessarily decommissioned some jets and used them as source for spare parts.

The new CEO announces that one of his first measures will be to reduce the maintenance backlog. This will not only cost money, but also time. The fleet currently consists of 44 Boeing 737 NG, ten Airbus A330s and 26 Embraer E190s at Austral’s subsidiary, the manager said. However, there could have been a misunderstanding here in the interview, because all leading aircraft databases count a total of 44 Boeing 737, 39 NG (31 737-800, eight 737-700) and five currently 737 Max.

Embraer E195-E2 and more Airbus A330

Plans of his predecessors to sell Austral’s Embraer airplanes and replace them with much larger planes, Ceriani calls «crazy». It is a very versatile model that allows take-offs and landings where larger aircraft cannot be used. He wants to stay with Embraer aircraft. However, the goal is to switch to the new generation E195 – the E195-E2.

The union Asociación Argentina de Aeronavegantes also announced that Ceriani had informed it that further Airbus A330s were to be procured. These will replace the last Airbus A340-300, which the previous boss, Luis Malvido, initiated to retire shortly before his resignation without appointing a replacement.

700 million dollars in government aid

In addition, the new Aerolíneas boss wants to bring outsourced services such as social media back into the house and thus save money, as he explains in an interview with the newspaper. He also criticises the fact that in 2019 around 13 million US dollars will have been spent on Google advertising alone. He apparently wants to cut back on that, too. In addition, contracts with external legal advisors are coming under scrutiny.

Ceriani estimates that in 2020 the airline will need around 700 million US dollars in state aid. He says that this is roughly the same amount as last year.