Government-owned Tame Airlines announced plans on Tuesday it says will help get the carrier out of debt. Among them, says general manager Octavio Pérez, is the termination of 80, mostly management-level, personnel. Other lay-offs may follow, he said.
Other cost-cutting moves include the sale of 11 properties and five aircraft as well as the cancellation of orders for three new jets. Proceeds from the real estate and aircraft sales should total $6.1 million, according to Tame’s fiscal department.
After it sells several other aircraft during 2018, Pérez says Tame will operate entirely with leased aircraft. “We want to get out of the airplane ownership business, and lease aircraft that are less than seven years old,” he said.
He added that the airline is working aggressively to collect accounts receivable, mostly from international ticket sales, amounting to $8.4 million. “The goal is to collect most of the funds by the end of the year so we can pay off operating debt,” he said. Some of the debt, he said, is owed by the government for transporting officials, including the president, that date back two years.
In another cost-cutting measure, Pérez said Tame would discontinue its Quito to Caracas, Venezuela service in early 2018. The decision was made due to dropping revenue and security concerns at the Caracas airport.
On other issues, Pérez said the airline has made a priority of improving its national service, particularly in scheduling problems.
In total, Tame’s debt amounts to $175 million to the government and $19 million to private suppliers.