Air Transport World

Avianca: Adalante! (Avianca Airlines) (includes related articles) (Company Profile)

BOGOTA--Avianca became the last of the major int'l Latin American carriers to complete a fleet-renewal program when it signed with GPA last January for the financial lease of 11 McDonnell Douglas MD-83s and two Boeing 757s, in addition to the sale/leaseback of a Boeing 747-200.

When the new transports join the current fleet of two 767-200ERs and six 727-200s--all should be in by September--the move, together with the phaseout of the 727-100s still flying the red-brick livery of the airline, will be the symbol of Avianca's struggle to compete in the environment of worldwide deregulation, as well as explaining why the carrier took so long to modernize. All of its peers in the region did so much sooner.

The fleet renewal, the first but cautious step of which came in 1988 with signing of a contract for the acquisition of the two Boeing 767s, is the most glamorous but not the only visible item on Avianca's modernization agenda. An earlier starter was the program to update its reservation system, begun that same year through a contract with IBM and acquisition of British Airways' Maxipars CRS.

By last January, the joint effort of the three companies resulted in the start-up of Condor, as Avianca refers to the offspring CRS, now working with Air Fare, Sahara and Timatic application programs.

January actually was a big month for Avianca. During the month, the airline, probably the second-oldest in the world after KLM, managed to acquire 58% of its own foreign debt, with a discount of 53%. Thus, the debt, in foreign currencies, was reduced to $21.2 million. The deal was important, because it eased the burden that payments had imposed on Avianca's economic results and cash flow. Between 1986, when the debt--then totaling $170 million--was renegotiated with the banks, and the end of 1991, Avianca had paid $115 million plus $55 million in interest.

That it all happened in January demonstrates the airline's struggle for stability after several years of turbulence that included in-house troubles and political turmoil in Colombia, and the new dimension that shook it last year--deregulation. …

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