Tame aviation Ecuador

The Liquidation of TAME EP and the aviation situation in Ecuador

The día 19 May 2020 the aviationón ecuadorian changedó forever after the announcement of the President of Ecuador, indeed, by Executive Decree 1061 it was arranged the liquidacióNo. of Company Púunit TAME Línea AéEcuador area “TAME EP”.

The document indicates the deadlines for, First of all, Carry out actions to have the greatest amount of assets to cover the payment of your debts expeditiously and in accordance with the priorityón legal. Subsequently enter into a liquidation processón up 210 días and finally transfer remainders of its assets to the Ministry of Transportation and Works Púwar.

This liquidationón occurs in the midst of the affectationón due to the COVID-19 virus pandemic, what endedó to aggravate the situationón and give the final blow to the aerolínea that he carried near 58 añthose of history. Nevertheless, I decided itón taken responds to a scenario that is presumedíprobably for some time nowños. It is known that the aerosolíwhat accumulates péoperational losses toño a añor from the 2012 until you reach meás of USD 300 millions. These aspects, added to the delicate situationón económica from Ecuador, led the National Government to the decisionón not to continue your support for your airlineíline and justify with its liquidationón part of the needs for tax cuts during the health emergency. Unfortunately, there is more of 900 affected workers to leaveán to provide their services to the airlineínea.

With the liquidation announcementón de TAME EP, the aviationóEcuadorian woman faces a very hard blow, what's up más allá of the sadness of seeing the úlast “aerolíflag line”. This concept that increasingly disappears más in the industry, puts an end to an aviation iconón and Ecuadorian identity, that I livedó good and bad moments, but what, since when I was bornó under the administrationón of Force AéEcuadorian area, had the challengeíto connect to each cornerón of Ecuador.

There are several factors that can explain the arrival of TAME EP to this outcome. An excessive expansionón international without further market studies, probably neglecting its strength in the local market, flaws in marketingón, growth of a heterogeneous fleeténea (until 17 ships compared to 5 assets in liquidationón[1]) with the complications of maintenance and pilot training, and an important wage bill for nearly 1600 people at their peak in the 2015, coverage of local routes in airports without increased demand, among others that can beíBy evaluating a más detail..

From this moment, the aviationón from Ecuador lives a new reality, a competitor that maintainsíto second place in participationón the market do not returná to fly ¿o sí? and the cake is distributed for the 3 aerolíprivate lines: LATAM Ecuador, Avianca Ecuador and Aeroregional, but faced with a highly difficult panoramaícil generated by COVID-19.

Indeed, The pandemic has put the entire industry in checkéarea and tourism at a global level with the greatest historical crisisórich acquaintance and the aerosolsílines that operate in Ecuador are notán alien to this situationón. The future isúuncertain with a reactivationón gradual start 1 last june, of these aerosolíregular neas.

Prior to this crisis, both Avianca and LATAM haveíinteresting growth plans in the domestic marketénational style, where the first intendedíto fly to Nueva Loja and the second to Coca, Loja and Santa Rosa, All these plans have been left waiting for a better and más encouraging outlook, that without a doubt and as IATA itself says, couldíto take someños.

The effects of this pandemic on the sectoréprisoner from Ecuador toún have not been quantified, but the reductionón of the tráI'm theépassenger prisoner in the país habríhereído más of the 98% from the 17 march 2020, díbecause regular operations were suspended, and although aerosolíCompanies like Aeroregional have been able to maintain certain income by carrying out repatriation flights.ón international under modality chárter, just like LATAM, the outlook after the opening of regular operations since the 1 June 2020, tests the efficiency and creativity of the aerolínecessary to maintain its operationsón in the país in a profitable way, but above all, long term sustainable, más aún taking into account the time that caníto take this recoveryón.

Since the beginning of June, little by little it was reactivatedó the sector toéreo, with fewer frequencies than isáwe were accustomed and occupations of the 30% or fewer passengers on some flights, but it is important to give añto the beginning and that the market receives that stimulus and confidence so that passengers return to the airports, the planes take off again and the economyíto become dynamic again, being the aviationón essential to achieve this objective.

not the best view, but in the face of a crisis there is always an opportunity and más aún when an aerosolíline that maintainsía strong presence in the market byñsell them from this, opening the doors for current operators to become stronger or for a new competitor to, like a low cost, explore theún undeveloped market aéprisoner from Ecuador with a new concept of flying, to which we are accustomed until now.

[1] The TAME EP fleet up to díto the liquidation announcementóIt was made up of an Airbus A319 (HC-CGT inactivo), an Airbus A320 (HC-CPB) and three ATR42-500 (HC-CLT, HC-CMH y HC-CMB), these úlatest turboh planesélice are part of the assets of the airlineínea, along with two Embraer 190 what's upíhave been removed from the active fleet in December 2019.

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8 comments on “The Liquidation of TAME EP and the situation of aviation in Ecuador”

  1. The politicization of a public company is the cause of disasters (in Ecuador) cheap, they dislocated him with the excessive income of personnel.

  2. I would like the names of the administrators responsible for the TAME debacle to be mentioned in the comments, well until the 2012 date on which we were fired more than 200 employees, the Company was still sustainable, but nevertheless on those dates nobody said anything, bye and nothing else. In the comments the situation is generalized, facts that we all know and it is not possible to point out the true culprits with their first and last names, those of the leadership of the company, managers and others who used in their time,

    1. Tame EP is created in May of 2011 and starts flying abroad two years later, in June of 2013, which coincided with the change to the new Quito airport in February of the same year. Since that year, the destiny of Tame EP has been compromised by venturing into the international market without being part of an airline alliance., without a connection HUB suitable for the needs of the market, which led him to have a very low profitability compared to the investment made in all routes, which, added to the expenses for the lease of aircraft and their respective operating and maintenance costs, left it totally financially weakened to be able to meet its current and short-term obligations., taking it to its liquidation. I think it is unnecessary to indicate names, since the damage occurred from the beginning of Tame EP due to bad decisions from its board of directors made up of people who obeyed a political project that in no way conformed to how an air transport company should be managed.

  3. Just as its bankruptcy occurred with other Ecuadorian airlines such as Ecuatoriana, SAN, SAETA or others, even if they are similar or similar circumstances such as that of TAME, there will be other airlines that take the routes or expand like LATAM, Avianca, Aeroregional o AAndes. I am sure that it will recover in the national market, Personally, I would have liked TAME to be recast and save the brand ??

    1. As you should know, Avianca and LATAM have filed for bankruptcy, taking advantage of the chapter 11 of American legislation, which allows them to temporarily suspend their debt payments and their restructuring. This situation has led them to stop serving some routes in addition to suspending their aircraft orders and with it the dismissal of personnel, as is the case of LATAM, which closed operations in Argentina indefinitely with losses of more than 280 million dollars in the last two years. Let's hope that your operation in Ecuador will continue, since otherwise the offer of flights would be greatly affected.

  4. Completely agree my dear Pablito a little bit of all excess staff mismanagement and political interference led to the current situation of tame

  5. Dear Nicholas, It is also necessary to note the excessive indebtedness in aircraft leasing to meet the opening of international routes and the lack of studies of returns on investment in those routes.. Consequently, the return values ​​on the routes were less than the money invested, which, together with the COVID-19 pandemic, led it to an unsustainable situation on the part of the Government, decreeing its liquidation.

  6. There are two edges to the collapse of Tame EP. The first lies in the lack of planning and control of their finances, the opening of unnecessary international and domestic routes and their high administrative costs due to excess personnel and, the second for political interference in the company, which left her at the mercy of the competition, much better prepared and efficient to take over the Domestic market in which Tame EP lost prominence and participation for almost a decade when it changed its Vision and its Mission for which it was created.

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