Bolivia's Aerosur ceases operations

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Bolivia's largest airline, Aerosur, has suspended all domestic and international flight operations from 31 March, leaving thousands of passengers stranded.

While the airline has made no official announcement, its website remains inaccessible and its Bolivan call centre unreachable. An employee at Aerosur's Madrid office confirms that the airline is "not operating" and "is not paying employees and providers", which forced the airline to cancel its 31 March evening departure to Santa Cruz and ground its aircraft in Madrid.

Bolivia's Minister of Public Works, Vladimir Sanchez, confirmed on Bolivian TV that the airline had ceased operations. He denied reports that the Bolivian government had forced the grounding. Sanchez confirmed that Aerosur's tax debt amounted to 1.34 billion Bolivianos (US$ 142 million), although Aerosur had disputed the amount in previous occasions in local courts, where the case remains open. This has so far prevented the government from impounding Aerosur accounts or goods. The actual debt, including interest, fines and debt with banks and providers, could vastly exceed this amount.

"We will do our best to save the jobs and recover the operations of the airline," Sanchez said, but he added: "But we will not use public money to subsidise the airline. We will do what we can to help the airline to be able to help itself, but they [Aerosur] will have to develop their own rescue plan."

Two years ago the Bolivian government launched Boliviana de Aviacion (BoA), as the successor airline of former, now bankrupt, flag carrier Lloyd Aero Boliviano (LAB), from whose failure Aerosur benefitted significantly. After BoA's launch, Aerosur accused the government repeatedly of trying to drive it out of the market by offering below-cost airfares.

Aerosur started operations in 1992 on domestic routes, coinciding with the liberalisation of the Bolivian market and shortly before LAB's privatisation. During the early 2000s, Aerosur expanded its international network, replacing de-facto LAB as Bolivia's international airline.

After a Bolivian government decree in 2010 banned aircraft older than 25 years from operating in Bolivia, Aerosur was forced to replace its aging fleet of Boeing 727 and 737-200 jets with newer 737-300s and -400s on domestic and regional routes.

It operated a 767-200ER to Miami and flew a 747-400, leased from Virgin Atlantic, to Madrid.