SATA Internacional (Ponta Delgada) is to restructure its operations ahead of a rebranding in which it will become Azores Airlines (S4, Ponta Delgada). The move is aimed at enhancing the carrier's link with its home market of the Azores, a group of volcanic islands situated in the North Atlantic Ocean about 1,360 km west of continental Portugal.
Local media reports state the Azorian carrier last week unveiled a five-year strategic plan covering 2015 to 2020 in which it aims to both reduce its fleet of three A310-300s and four A320-200s and its staff compliment. Overall savings are expected to help reduce the airline's debt from EUR179million (USD207.64 million) as of December last year, to EUR40million by 2020.
Airline chairman Luis Parreirão will present the plan to employee unions this week, and has assured them there will be no forced redundancies.
SATA is faced with a changing playing field with budget carriers Ryanair (FR, Dublin International) and easyJet (London Luton) now set to enter the Azores - Portugal market, once the Azorian airline's preserve thanks to now-discontinued government subsidies. Another development that is set to dramatically impact the airline's fortunes is the United States' decision to withdraw 500 United States Air Force (MC, Washington National) personnel from its Terceira/Lajes air force base - a move that will certainly have an impact on the local economy and therefore the airline itself.
In terms of its operations, SATA plans to strengthen its flights to the United States and Canada while investing in the Açores, Cape Verde, Canaries and Madeira markets. Its SATA Air Acores (SP, Ponta Delgada) subsidiary is expected to be profitable until 2018 so long as government subsides for intra-island flights are maintained.
A groundhandling operation, SATA Serviços, is also to be established in 2016 in order to serve Ryanair and easyJet's needs when they make their respective debuts.
Overall, once the restructuring programme has been completed, parent holding firm SATA SGPS will directly control SATA Air Açores, Azores Airlines, SATA Serviços Partilhados, and SATA Serviços resulting in a company whose cost-base and decision-making processes are both more economical and efficient.
