After less than six months in operation, Itapemirim Transportes Aereos (ITA), the newest Brazilian airline, suspended flights on Saturday.
The company claims that it will carry out an ‘internal restructuring’ before resuming its flight network, however, the precarious financial situation made analysts in the country consider the hypothesis as unlikely.
Founded by businessman Sidnei Piva, ITA had ambitious plans to serve 35 domestic destinations and debut international flights in 2023. But the project has always been characterized by improvisation and lack of planning.
When it debuted in July, Itapemirim had only three Airbus A320 aircraft leased, but promised to reach 10 planes in August. This week, only five jets flew while two were parked due to technical problems.
The airline’s business model was also being challenged in an industry known for tight profit margins. Rather than making the most of the cabin’s interior space, ITA configured its A320s with just 162 seats.
The company also offered free checked baggage allowance and seat assignments, as well as in-flight service included.
The first figures released, however, showed that Itapemirim could not occupy the flights properly, with a load factor of only 57% in September – the company did not release recent statistics.
Recently, complaints from passengers and employees have increased, in addition to cancellations and sudden changes in the flight network.
In an interview, the CEO of Itapemirim Adalberto Bogsan stated that there was an expectation of a investment of R$ 200 million ($35 million) by a Brazilian fund, but that did not happen.
When it was announced, in February of last year, the company claimed to have guaranteed an investment of funds from the United Arab Emirates of $500 million, but Bogsan admitted that the money did not come to Brazil.
The suspension of Itapemirim flights joins numerous other initiatives by airlines in Brazil that ended up succumbing. The air travel market in the immense South American nation is considered one of the most promising in the world, however, economic and structural difficulties have always made the business extremely complex and risky.