The Superintendence of Transportation of Colombia has issued an administrative measure to monitor Ultra Air operations, due to the fact that the airline has low liquidity, increasing the risk to comply with long-term obligations.
The contractual situation related to the aircraft available for use in air services -there were rumors indicating that a lessor was ready to retrieve five Airbus A320 from Ultra Air’s total fleet of six- “reflects a vulnerability to the operating capacity that allows it to comply with its operations, as well as with its obligations with the cargo market, mainly those related to suppliers and advance ticket sales”, said the governmental agency.
The controlling agency issued a series of measures that Ultra Air will need to comply immediately to avoid fines: the company must implement a work plan that includes a detailed schedule of its routes, including commercial flight schedules for each of the seven (7) days of the week, determining the personnel and crew of each aircraft and the number of operations.
Also, it shall notify SuperTransporte every Monday for the following three months any economic and operational difficulty arises that may harm the airline’s services, as well as any negotiations aimed to improve its capitalization.
The operator must carry out the necessary preventive or corrective measures related to the passenger management plan in the event of a possible cessation and/or suspension of operations and shall notify the Superintendence of Transportation of the mechanism by means of preservation of early ticket sales liabilities to guarantee the measure of protection to passengers in the event of an eventual cessation and/or suspension of operations.
The company issued a statement in which confirms that it has temporarily suspended the sale of tickets for flights operated until April 30, anticipating an scenario in which it will not have all the planes to fly all scheduled routes.
See also: JetSMART withdraws from Ultra Air acquisition
After JetSMART’s withdrawal, future is not looking good for Ultra Air: a company that has liquidity issues and is not able to sell tickets will depend on external capitalization, something that is not cheap and that can be hard to find, given the conjuncture. Time will tell, but Ultra’s fall is on the verge of being unavoidable.