Tame EP Ecuador and its aeronautical future

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In this post we will talk briefly about Tame EP Ecuador and its aeronautical future. Many have read in recent months, especially my tweets informing about the cancellation of routes, fleet reduction, potential majority sale of shares and updated information of the flag carrier of Ecuador, But what is its future now that the search process for a strategic partner has been declared void??

Before getting to this point, It seems appropriate to me to talk about the current situation of Tame, the routes it has closed or reduced and the planes that no longer fly.

Current overview of Tame EP

Tame is the largest airline in the country in market share, with on the 52%, according to information of the year 2016 from www.anna.aero, one of the world's leading and most respected industry analysis portals. In the most recent study of the Ecuadorian air market, the website places Tame with the 34% seats offered on Avianca Ecuador (now as second in the market) with the 24% before 21% and LATAM Airlines Ecuador with the 19% before 18%. These data show a clear reduction in capacity of Tame, that has lowered its share of chairs in the market for 34% al 30%.

the monthly offer, as seen in the graph, has been lowering its capacity month by month since April 2014, until reaching the limit of the 200 thousand seats per month at present, with a reduction of 20% in January of 2017. Followed by this offer reduction, Tame also shows a reduction in its capacity of seats offered internationally, where is the main supplier of the market, having reduced his offer by a 15% compared to the year 2015.

Rutas Tame EP

From the 2014, Tame has made a number of adjustments to its routes, where the most marked and important changes have occurred in international routes, where low occupancy and therefore zero profitability, has generated that attractive routes in the market have been closed. Below is the list of international closed routes by Tame in chronological order:

International routes canceled from Tame

• Quito – Panama, operated 3 times a week at Embraer 170 – Embraer 190.
• Guayaquil – Panama, operated 4 times a week Embraer 170 – Embraer 190 (1april th 2014).
• Quito – Fort Lauderdale, operated daily flight on Airbus A319 and Airbus A320. Closure coincides with the start of flights on this JetBlue route.
• Quito – Lima – São Paulo, operated 4 times a week on Airbus A319 and Airbus A320.
• Quito – São Paulo, operated 3 times a week on Airbus A319 and Airbus A320.
• Quito – Buenos Aires, operated until 1 daily flight on Airbus A319, subsequently lowered to 4 weekly, 3 weekly until it was finally closed.
• Quito – Havana, the most recent closing. came to operate 4 times a week on Airbus A319.

The vast majority of these routes began operating at the beginning of the 2013 as the airline's strong international expansion plan (Panama operated from 2010). These cancellations have not been added to what could be considered as cancellation of the flights from Guayaquil to New York and Guayaquil to Lima, since these flights have been changed back to Quito since March. Remember that the change of base of the Airbus A330 HC-COH for these flights has already been carried out 3 times, even without knowing the exact reasons why these changes are made periodically, in the most recent change and return of the flights between Quito and New York it was learned that it would be due to an important cargo contract, strong of the A330.

CANCELED NATIONAL ROUTES OF TAME

On the national scene, Tame has also made adjustments to its operation, always seeking profitability and reducing the subsidy for routes known as social, but that are not profitable and generate significant losses for the airline. The domestic routes that Tame has closed to date are:

• Quito – tulcan, operated until 5 weekly flights on ATR42-500.
• Quito – Macas, operated until 5 weekly flights on ATR42-500.
• Quito – Macas – Again, operated 3 weekly flights on ATR42-500.
• Guayaquil – Esmeraldas, operated 1 daily flight in ATR42-500.
• Latacunga – Coca, operated 5 times a week from Monday to Friday on ATR42-500.
• Guayaquil – Latacunga, operated until 5 times a week, later reduced to 3 flights, after 2 and 1 until closing the route in ATR42-500.
• Guayaquil – Cuenca, operated until 3 daily flights from Monday to Friday and 2 daily on Saturdays and Sundays in ATR42-500.

as it becomes clear, the national routes in Ecuador that have been canceled are those that operate with the ATR42-500 equipment, which provides optimal operating conditions for these low-demand destinations, offering the airline a lower cost per mile flown and higher return, but in the face of a well-known unfavorable panorama for the air market, these routes could not be sustained, especially with the losses that the airline has accumulated since the 2014 and that they are public knowledge.

This list does not contemplate the reduction in frequencies and offer that some destinations have had, such as Salinas, Coca, Cuenca, Guayaquil and others.

Current Tame Routes

Tame went from covering 15 domestic destinations in Ecuador to 12 Destinations, these are Quito, Guayaquil, Esmeraldas, Manta, Salinas, saint rose (Machala), Store (Catamayo), Cuenca, Coca, Sour Lake, Saint Christopher and Baltra.

Regarding international routes, Tame came to operate in full growth throughout the region 9 Destinations, operating now 6, which are New York (daily flight), Fort Lauderdale (4 times a week), Caracas (operates in triangulation with Bogotá, now with 6 flights per week, Before they were 5 and at the beginning I fly daily), Bogota, Cali (3 weekly flights) and lime (daily flight).

The same study of ANNA, shows the best 12 Tame routes in terms of seats offered weekly one-way, revealing that between them, 3 They are international to New York, Lima y Fort Lauderdale, not necessarily showing that they are the most profitable, but if you let us know where Tame sets its efforts to increase its income and marketing strategies.

Tame Fleet

The fleet has not been left behind in reductions as expected and logical with fewer flights. Also in my account Twitter have been able to see how Tame has reduced its operational fleet of 17 aircraft composed as follows until the middle of the 2016:

• 1 Airbus A330
• 5 Airbus A320
• 4 Airbus A319
• 4 Embraer 190
• 3 ATR4500

for different reasons, Tame's fleet was reduced to 8 operational aircraft (potentially are 10), some cases due to the end of the leasing contract, maintenance or incident in Cuenca as an example. Tame's current fleet is made up as follows:

• 1 Airbus A330
• 2 Airbus A320
• 1 Airbus A319
• 2 Embraer 190 (HC-CGG would soon enter the flight line after having an incident on the ground with a service truck).
• 2 ATR4500 (HC-CMB in scheduled maintenance check C in Latacunga).

With the return to flight of the Embraer 190 HC-CGG and ATR42 HC-CMB Tame could potentially bring back some of the closed routes, although of course, everything will depend on the analysis of profitability and feasibility, since having a relatively tight fleet and without backup, the putting into flight of these 2 aircraft could give the facility to the airline, if the cycles and times coincide, in putting other aircraft on the ground for their respective maintenance scheduled by the manufacturer.

The search for a new partner

Much has been said since 2016 that Tame would open its share package to a new partner. Several times the General Managers on duty announced that the process was advancing and several candidates sounded for the airline.. Rumors of major airlines in the world sounded at the time, but it was not until March that the contest to sell the majority shareholding of Tame for more than USD was made public. 60 millions. This process went through 4 postponements that were public knowledge, until the 19 may finally, after months of waiting, the contest was declared void as there were no bidders, even though it was talked about 2 potential buyers according to some portals and rumors, these could have been china company, Spanish, North American and there was even talk of Amaszonas Bolivia, although we will not know this due to confidentiality agreement issues.

Once the process is dismissed, It will be time to wait for the new Government of Ecuador to define its guidelines or objectives that it will have for Tame in the service of the country, either to repower the airline with public funds or to open a new contest with new bases and regulations for the sale of Tame.

I hope I have not bored you with this long post., but there was a lot to talk about. I will keep updating when we have news about our beloved flag carrier.

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