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Aviation History
1988
1988 - 0024.PDF
Viasa: an airline short of oil Viasa was once prosperous because of Venezuela's healthy oil- based economy. When that flopped, Viasa was in trouble. Now the airline has picked itself up, and is looking for income that does not depend upon the oil economy. Nick Brough reports from Caracas. Few managers of major international airlines have had to face a year-over-year drop of 41 per cent in the number of passengers carried, but that is precisely what happened to Viasa in 1983, in the wake of the worldwide collapse in oil prices. The Venezuelan carrier's traffic continued to decline during the following years, while its losses and debts increased until it had a negative net value at the end of 1984. Under new management, led by chair man Luis Ignacio Mendoza, Viasa is now firmly on the road to recovery. A net profit in 1986 is all the more remarkable, consid ering that traffic fell again during the year, and that the Venezuelan Government has adopted a dual-designation policy for many international routes. "Last year we made an operating profit of 125 million Bolivars ($4 million) and a net profit of Bs97 million, which we expect will rise to around Bsl50 million for 1987", finance director Oswaldo Sarmiento tells Flight. How was the turnaround achieved? "First of all we had to rationalise both the administration and operations," says Sarmiento. "Personnel was cut back, and on the administrative side we took such measures as ensuring that receivables were paid as soon as possible to improve liquidity. In operations we had to be honest with ourselves, and cut poorly performing routes and such habits as issuing free tickets. Another important measure was that of instilling a sense of enthusiasm in the staff." While trying to improve operations, the airline also had to withdraw its DC-8-63s because of the noise restrictions enforced in the USA. The entire fleet has been cut back from a total of 18 aircraft in service during 1983 to five DC-lOs and the two Airbus A300s recently acquired from Lufthansa through a financial leasing arrangement with GPA. A Boeing 747 freighter was used part-time for services to the USA until October, and until two years ago two DC-9s were leased from Martinair for Caribbean routes. The DC-lOs are now used on the Euro pean routes and to the USA, with an over all utilisation of 12hr a day, while the A300s are used on domestic and Central American regional routes, and on some flights to the USA. "The Airbuses are used on routes with an average of 2hr flying time, while the longest route is to Hous ton, a 5hr trip", points out Capt Rogelio Cortez, operations director. Network and operations rationalisation is not enough to ensure the long-term health of an airline, which is always a problem in a period of economic recession, inflation, and devaluation in the home 22 Viasa recently operated Boeing 747s, but with the slump in world oil prices its business has slumped too. It sold the 747s, retained these DC-lOs, and has recently leased some Airbus A300s. FLIGHT INTERNATIONAL, 2/9 January 1988
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