Ecuador plans to privatise TAME, the army airline which operates domestic and international passenger flights using a fleet of Boeing 727s. The main aim of the move is to find a strategic partner.

TAME executive president William Birkett says the government has sent a bill to Congress proposing the privatisation of the airline, which has increased its share of the domestic market following the demise of Saeta.

Birkett says that if the bill is approved, the airline will have six months to implement legal measures allowing it to become a private company. The airline has to be audited and valued to determine the number and value of shares. "All the shares will remain with the government of Ecuador through the air force until we find a strategic partner to join with," Birkett says. "We realise that TAME on its own will not achieve significant growth in the future. We will need to change the aircraft of our fleet in the medium-term, plus have the know-how of a strategic partner to become more efficient."

Ecuador's airlines have been hit by the economic crisis that has battered the nation. This led to the demise of Saeta, which was grounded in March amid financial difficulties, leaving Ecuatoriana as TAME's only major competitor.

TAME, which carried 1.2 million passengers last year, will need to invest around $250 million in the next few years to replace its fleet of 10 aircraft.

In addition, its status as a military airline means it is barred from entering the US market and taking over the potentially lucrative routes abandoned by Saeta. TAME flies to Santiago, Lima and Havana and is keen to increase its international presence. There has been speculation that TAME could link with Ecuatoriana, but Birkett strongly denies this.

Meanwhile, Saeta owner Roberto Dunn hopes to relaunch his airline using its remaining two 727s. The aircraft are at Guayaquil airport waiting for the result of airworthiness inspections.

Source: Airline Business