TAME, the national airline of Ecuador, has announced a restructuring.The airline experienced heavy losses during the past four years totaling USD$200 million.
The only concrete announcement made so far is the airline’s longest route, which connects Quito and New York City, will be cut. The airline operates the route six times per week (every day except for Monday) with an Airbus A330-200, which TAME acquired from Emirates for the route in 2013. The route will be canceled effective 1 February, 2019.
According to financial reports, TAME has lost between USD$12 and $14 million on its New York route since the route was launched.
Once this route closes, Quito will no longer have a direct flight to New York, although flights from JFK to Guayaquil will continue onboard LATAM 767s.
The fate of the A330 is still unclear, as the airline may choose to cancel its lease or use it on a more profitable route.
The airline is also reportedly considering cuts to its staff.
Once the JFK route ends, TAME will only have one flight to the United States, which will be its flight to Fort-Lauderdale, operated by an Airbus A320 family aircraft. The airline wants to improve its domestic service, which has been somewhat neglected by the airline recently.
The rest of TAME’s network includes international flights to Colombia, Panama, Argentina, Venezuela, and Brazil in addition to a limited domestic network and a charter network to countries such as Cuba and Jamaica.
TAME’s fleet currently consists of three Airbus A319s, five Airbus A320s, one Airbus A330-200, three ATR 42-500s, three Embraer E190s, and three Quest Kodiak 100s. However, a large portion of the fleet is not in service, with two A319s, three A320s, a Quest, and an Embraer E190 stored and out of commission. No reason has been given for why the airline has stored much of its fleet. However, it is likely due to high maintenance costs and low demand.
With an active fleet of only 11 aircraft, TAME is unlikely to open new routes, as aircraft utilization is likely already very high. With losses mounting and more cuts looming on the horizon, the future of TAME may be in jeopardy.
Featured image by Tom Turner via Flickr