(New throughout, adds details and comments)
By Antonio De la Jara and Felipe Iturrieta
SANTIAGO, March 30 (Reuters) - Avianca Holdings, one of Latin America’s largest airlines will hold off on receiving new planes as it looks to weather the region’s economic downturn with a conservative strategy, its president said in an interview.
By delaying the new plane shipments, Avianca will ease its need for capital, German Efromovich, speaking at the FIDAE regional airshow in Chile’s capital, told Reuters late Tuesday.
Avianca will also look to cut routes that are not “strategically important,” and will not look to significantly increase capacity this year.
“The initial plan was to renew the entire fleet for 2024, starting in 2017,” Efromovich said.
“What we’re looking at now is shrinking this process to the maximum extent possible and stretching its start out to 2019-2020.”
Avianca will wait until April to determine the extent to which the company will delay shipments for 130 planes already under order. He said that the company’s arrangement with plane manufacturer Airbus allows for some flexibility in this regard, within a “given deadline”.
On Tuesday, Airbus projected that the number of airliners in operation in Latin America will more than double over the next two decades, with 2,540 new planes needed by 2034, worth some $330 billion.
Efromovich said Avianca Brasil has maintained profitability despite the nation’s moribund economy thanks to a conservative strategy, and other Latin American markets have compensated for sluggish growth there.
But, he added, the short-term opportunities to increase capacity in Brazil were significantly diminished.
“I can’t say that Brazil is better, it’s worse,” he said.
“We were growing at 30 to 40 percent in previous years, and now we’re going to grow capacity this year between 5 and 6 percent through plane renewal.” (Reporting by Antonio de la Jara and Felipe Iturrieta; Writing by Gram Slattery; Editing by Chizu Nomiyama, Anthony Esposito and David Gregorio)