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Farnborough: Synergy Buys 62 A320neos for Avianca Brazil

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Farnborough: Synergy Buys 62 A320neos for Avianca Brazil

Farnborough: Synergy Buys 62 A320neos for Avianca Brazil
July 13
14:08 2016

LONDON — Synergy Aerospace Corporation, the parent company for Latin American powerhouse Avianca and its Brazilian arm Avianca Brazil, placed a firm order for 62 Airbus A320neo aircraft Wednesday at the Farnborough Airshow.

The aircraft will be used for a mix of fleet renewal and fleet growth of the Brazilian carrier. No timeline was revealed for delivery of the aircraft.

Avianca Brazil currently has a fleet of 44 active aircraft, including 11 Airbus A318s, 4 Airbus A319s, 28 Airbus A320s, and 1 Airbus A330-200 wide body. Including the groups other arms (Colombia, El Salvador, Peru, Ecuador, Guatemala), it operates a narrow body fleet composed of 21 A318s, 32 A319s, 89 A320s, 11 A321s, 11 Embraer E190s, and 4 ATR 72-600 turboprops for regional flights.

The wide body fleet consists of 10 Airbus A330-200s and 7 Boeing 787-8s, with 8 additional 787-8s and 10 Airbus A350-900s on order. Current generation narrow body orders include 7 A319s, 3 A320s, and 2 A321s, with Avianca proper having placed an order for 133 A320neo family aircraft split as 21 A319neos, 108 A320neos, and 4 A321neos.

The purchase by Synergy, particularly for growth at Avianca Brazil is oddly timed given that the Brazilian economy is in the midst of a severe recession. Its Brazilian rivals GOL and TAM are shedding capacity at a rapid pace with GOL even selling some of its fleet to its partial owner Delta Air Lines. The timing for a massive order, even with deliveries not commencing for several years, is curious.

Moreover, main group airline Avianca is in relatively stronger markets (Ecuador aside), yet Synergy felt enough pressure on liquidity with Avianca to begin shopping a partial or complete equity stake in Latin America’s second largest airline group.

Those cash pressures caused Avianca earlier this year to defer a significant proportion of A320neo deliveries between 2016-2019 into the next decade. Avianca Brazil’s financial performance is assuredly worse than that of the main brand, so it is extremely odd that Synergy would choose to buy such a large volume of A320neos at this exact moment.

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About Author

Vinay Bhaskara

Vinay Bhaskara

Senior Business Analyst, Big Airline Enthusiast, Avid Airport Connoisseur, Frequent Flyer, Globetrotter. I Miss Northwest Airlines Every Day. vinay@airwaysmag.com @TheABVinay

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1 Comment

  1. Goytá F. Villela Jr.
    Goytá F. Villela Jr. October 10, 22:43

    Vinay, the second-largest Brazilian airline’s name is not “GOL” (gee-oh-ell) in all caps, it’s just “Gol,” pronounced as written. It’s not an acronym, it’s an actual word – and a borrowing from English, as it comes from “goal.” In Brazilian Portuguese, “gol” is either the score hit in Association football (i.e., soccer) or the netted target area where the ball is kicked to score. (In Portugal, it’s “golo,” but it also comes from English “goal.”)

    The company’s name was a genius marketing idea in a notoriously soccer-obsessed nation, as if it were saying “you score a hit when you fly on us.” Their new logo has a second shaded “o” suggesting the traditional scream of Brazilian sportscasters (“gooooool!!!”) when a goal is scored in a soccer match.

    As for TAM, *that* was an acronym indeed (which stood for many things during its existence, but was always pronounced “tam” as well, rather than “tee-ay-em”), but TAM doesn’t exist any more with that name – it is now LATAM Brasil, part of the Chile-headquartered (but not fully Chilean-owned) LATAM Group, though only a handful of aircraft have the new livery and the new name on them so far. And it had already changed to the new name in July 2016, when this article was written.

    It’s also not exactly correct to say that Avianca Brazil is an “arm” of the “main” Avianca (from Colombia). Rather, Synergy, headquartered in Brazil, separately and independently owns both Avianca Brazil and Avianca Colombia, the latter of which also owns subsidiaries in Ecuador, Peru, and Central America. So, there are two airline sub-groups, both owned by Synergy, which also owns the worldwide rights to the Avianca brand.

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