Argentina's Sol reduces network, postpones fleet renewal

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Argentina's Rosario-based regional airline Sol Lineas Aereas has announced plans to reduce its network in response to the expansion of Aerolineas Argentinas' expansion on regional routes and the economic crisis in the country.

In an interview with Flightglobal, Sol's chief operating officer Horacio Darre reveals the details of the route restructuring, which has already been implemented.

"We will drop Cordoba-Mendoza-Neuquen on 1 July," explains Darre. "And we already stopped flying to Bariloche, Esquel and Ushuahia."

While the former has been made redundant by a new Aerolineas Argentinas route, the latter was cancelled after an agreement with the province of Chubut expired.

Sol has also dropped plans to set up a regional hub in Cordoba to connect with flights of codeshare partner Aerolineas Argentinas.

"We are in a strategic retreat until the situation improves," says Darre, saying that his airline will concentrate on its core routes where it either is the only operator or has a critical mass of weekly frequencies to be competitive.

After 1 July, Sol will operate only on three routes, connecting Buenos Aires Aeroparque with Rosario (15 weekly frequencies), Santa Fe (11) and fives times weekly service on the "Atlantic Corridor": Aeroparque-Mar del Plata-Bahia Blanca-Trelew-Comodoro Rivadavia-Rio Gallegos-Rio Grande.

Sol's fleet renewal program has also been put on ice. "We are selling one Saab 340A and we will keep four, including one backup aircraft," says Darre. This will leave the airline with two Saab 340As and two 340Bs.

The Argentinean economy has been hurt significantly by a formal devaluation of the peso against the US dollar by 23% in January and rampant inflation, second in Latin America only to Venezuela's. The devaluation and inflation have had a negative impact on the airline's cost and income base.

In light of the deterioration of the regional aviation business in South America's second largest country, which has left many communities without regular air services, a group of legislators recently proposed to the parliament the introduction of a special stimulation package to help regional airlines operate on currently unprofitable routes.