Mario Fonseca/RIO DE JANEIRO

The launch of a new Bolivian carrier by Brazil's TAM (Transporte Aéreo Mercosur) has led to turmoil within the smaller nation's airline sector. Staff at flag-carrier LAB (Lloyd Aéreo Boliviano) - controlled by TAM's Brazilian rival VASP - are taking industrial action over the threat they believe it poses to existing airlines.

TAM-Bolivia was granted a 180-day operating permit by the government on 7 April, and the airline is poised to launch services using two Fokker 100s. Nearly 2,600 pilots, cabin crew and ground staff at LAB and other operators responded with a 24-hour strike on 30 May, with LAB pilots threatening indefinite action.

Bolivia has 10 scheduled and non-scheduled carriers in addition to LAB, and though all oppose the new entrant, the flag-carrier has most to lose. LAB saw revenues drop 16% in its last fiscal year, and in 1999 its monthly load factor failed to rise above 54%. It also has growing debts relating to aircraft landing and parking fees, and deferred social security payments.

Debts to Colombian airports may see flights to Bogotá halted, but VASP, its 49% owner since 1995, has been unwilling to help because of its own financial problems. Brazilian sources say VASP may even sell its LAB holding, although Brazil's ambassador to Bolivia denies reports of talks with Lufthansa, and claims VASP may increase its stake should the US FAA ease restrictions on LAB's operations. VASP also manages LAB, allowing it to raid a Boeing 727 and 737 spares cache at Cochabamba (including Pratt & Whitney JT8D engines valued at $6 million) for use on its own Boeing 727-200F cargo fleet.

Source: Flight International