Pluna auction postponed

Passenger traffic at Montevideo’s Carrasco Airport is down following the bankruptcy of Uruguayan airline Pluna and airport retailer Duty Free Uruguay is suffering – along with others.


Pluna was declared bankrupt in early July, having accounted for more than 60% of aircraft movements at Montevideo’s Carrasco Airport in HY1.

Pluna had previously operated scheduled service to Argentina, Brazil, Chile and Paraguay. Local analysts estimate that close to 50% of the passenger throughput at Montevideo used Pluna flights.

Since the reported insolvency, BQB Airlines, Aerolineas Argentinas – Austral, TAM, Gol and LAN have all increased frequencies and capacity to satisfy regional demand, but the airport will still show an important fall in traffic at the end of the year.

Duty free concession holder Duty Free Uruguay, now controlled by Swiss based Dufry, along with other retailers at the airport, were hoping that the Uruguayan government’s plans to auction the failed airlines’ jets would be just the kick start needed to get the passenger numbers back on the growth trail again.

However, the Uruguayan authorities surprisingly postponed the auction of the seven Bombardier CRJ900 jets, owned by the bankrupt airline, planned for midday last Thursday, until next month. Given the unexpected nature of the announcement, just a few hours before the start of the auction it would seem that the Uruguayan government’s proposals to sell off the planes have hit a major stumbling block.

Although government sources had indicated that there were at least four companies interested in attending last week’s auction, it now appears that BQB Airlines, a subsidiary company of the Buquebus Group owned by Juan Carlos Lopez Mena was the only bidder likely to be present and it seems that the company had already advised the government that the reserve price was above the real value of the aircraft.

Argentine airline Sol Lineas Aereas and Uruguayan bus company CUTCSA had indicated they would not be making an offer, leaving BQB the sole bidder. Earlier, some industry observers in Montevideo had indicated to The Business that Venezuelan airline Conviasa was also interested in acquiring the aircraft and was one of the seven parties to have paid $5,000 to purchase the auction documentation. The government has now set a revised date of October 1.

The government had set a reserve price of $136m for the aircraft in a bid to reduce the debts left by the former Uruguayan flag carrier. It now appears to be determined to get another party to be present at the new auction date and the Uruguayan business press has indicated possible interest from the Argentine Macri Group, although it remains to be seen if this declaration of interest is real.

The Uruguayan authorities now must be prepared to look at a Plan B in case the rescheduled auction does not take place next month. It may be forced to sell the planes to BQB at a reduced price, or study the possibility of leasing the planes to an interested party to ensure that the country is connected to other countries in the region.

The worst-case scenario would surely be the government setting up a new state owned airline, a sort of Pluna Mark 2, using the assets and some of the 800 employees of the old company. Given the weakening economic situation in the region, this scenario would not be ideal for the Uruguayan tax payer, although it would obviously be beneficial for Puerta del Sur, the airport manager and the concession holders at Carrasco Airport.

Pluna ceased operations on July 5 this year and was declared insolvent with debts in excess of $380m – the company was owned by Leadgate Finance (75%) and the Uruguayan government (25%). Canadian airline Jazz Aviation was said to own an unspecified part of the Leadgate shareholding.


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