Cosmo Airlines (Madrid) is growing fast. The charter and ACMI airline is the winning auction bidder for seven Pluna (Montevideo) CRJ900s. The new fleet additions will be brought to Europe for expansion of operations in central and eastern Europe. Cosmo currently operates two 180-seat Airbus A320s.
The company issued the following statement (translated from Spanish):
“Cosmo Airlines bid $137 million, and was proclaimed the winner, being the highest bidder.
The Cosmo Group has a fleet of two Airbus 320s, and is in the process of expanding the fleet with more Airbus A320 family aircraft. With the acquisition of seven Bombardier aircraft the goal is to give a quantitative and qualitative leap in its European charter flights operations.”
The objective of the Cosmo Group with the acquisition of this fleet of seven CRJ900s, is to expand its charter business in Central and Eastern Europe, since aircraft acquired are appropriate to cover all flight ranges that exist within of these regions.”
Pluna Lineas Aereas Uruguayas (Montevideo) operated seven Bombardier CRJ900s. The government of Uruguay is planning to auction off the fleet to the highest bidder. The winning bidder will also have the first option to resume operations as the new flag carrier of Uruguay according to this report by Bloomberg.
The government of Uruguay has decided to close down its bankrupt carrier after failing to find new investors to replace investment fund Leadgate which has pulled out. Uruguay assumed control over Pluna in June 2012 after Leadgate, which controlled a 75 percent stake, refused to contribute more capital according to Reuters.
The government is considering establishing a new flag carrier.
PLUNA (Primeras Líneas Uruguayas de Navegación Aérea) was established in September 1936 and started operations on November 20, 1936.
Pluna Lineas Aereas Uruguayas‘ (Montevideo) has cancelled all flights until tomorrow morning due to a work stoppage by its unions fearing that some positions may be eliminated. The flag carrier is facing a financial crisis and could soon file for bankruptcy. The strike and cancellations started late on July 3.
The airline issued the following list oc cancelled flights (in Spanish): CLICK HERE
In April 2010, Chorus (formerly the Jazz Air Income Fund) invested $15 million (USD) in Latin American Regional Aviation Holding Corporation (LARAH) in return for a 33.3% non-voting equity interest in the company, which translated into a 25% indirect ownership in Pluna. At the time of the investment, LARAH held an indirect 75% equity interest in Pluna; the Government of Uruguay held an indirect equity interest of 25%.
The Uruguayan government has taken control of Pluna, allowing the airline to continue operating. Chorus is working directly and cooperatively with the national government to produce and assess potential recapitalization and business plans for Pluna. As part of the proceedings, all of the shares in Pluna held indirectly by LARAH have been delivered in trust with the Montevideo Stock Exchange in return for certain conditions and indemnities from the Uruguayan government. There can be no assurances as to the extent of Chorus’ participation and involvement. Further, there can be no assurances that a successful recapitalization of Pluna will be accomplished, and if so, that Chorus will retain an equity stake or other investment therein.
Chorus is currently assessing the valuation of its original $15 million investment and how it will be accounted for in its second quarter financial disclosure planned for mid-August, 2012. The situation at Pluna has no effect on Jazz operations or current cash flows. Chorus will provide an update and share next steps upon the finalization of the review and will not speculate on the outcome or Pluna’s future.