What Happened To Uruguay Flag Carrier Pluna?

Pluna Líneas Aéreas Uruguayas commenced operations on November 19th, 1936. The airline was Uruguay’s national airline, operating passenger and cargo services across the country and South America. However, the company ceased operations in the summer of 2012, leaving Uruguay without a flag carrier.

A Uruguayan flagship carrier PLUNA aircr
Today marks 85 years since the Pluna commenced services before dominating the Uruguayan airline scene for the remainder of the century. Photo: Getty Images

A strong start

Brothers Jorge and Alberto Márquez Vaesa formed the airline in September 1936. They chose the name Pluna as an acronym for Primeras Líneas Uruguayas de Navegación Aérea (First Uruguayan Air Navigation Lines). A pair of de Havilland Dragonflys helped get operations going between Salto and Paysandú. The initial year was a success, with 2,600 passengers, 20,000 parcels, and 70,000 newspapers carried.

The progress continued throughout the decades, with Douglas aircraft joining the fold. These planes helped the airline’s network to expand to Uruguay’s neighbors. Destinations such as Santa Cruz, Bolivia, Porto Alegre, Brazil, and Buenos Aires, Argentina were all on the route map by the time the 1940s were over.

There would be a major transition in the 1950s marked by nationalization in November 1951. Growth started to slow down, but the network continued to develop, with the likes of São Paulo joining the fold.

Nonetheless, activity soon picked up again following the arrival of commercial jets. Pluna took on both the Boeing 707 and 737, heading to the likes of New York and Miami with the narrowbodies. The rise continued into the 1980s, with the airline even flying as far as Europe.

A Pluna Douglas C-47B (DC-3) sitting at Montevideo in Uruguay in 1975 – this aircraft helped scale up operations as the airline matured. Photo: RuthAS via Wikimedia Commons

Industry woes

Yet, there was another turn in the 1990s due to amounting financial struggles. As a result, the company sold over half its shares to Tevycom, a consortium from Argentina.

There was a series of additional ownership changes, and by the time the new millennium was in full swing, the government of Uruguay and Brazilian airline Varig each held a 49% share. However, Varig entered Chapter 11 bankruptcy protection in June 2005, leading to more worries and responsibilities for the government.

Pluna 737
Spanning through several eras in the history of aviation, the airline’s livery transformed significantly over the years. Photo: Aero Icarus via Flickr

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The decline

Debts were mounting heading into the 2010s. For instance, in 2008, Uruguayan national oil company ANCAP announced that it had cut off fuel supply to Pluna due to unpaid dues.

In 2012, the airline’s CEO, Matthias Campiani, shared concerns about the airline’s potential collapse. Notably, there had been troubles since the renationalization of Aerolineas Argentinas in 2008. Importantly, 21% of the carrier’s international seats were to Argentina. This factor, combined with several other political transitions to cause significant challenges for Pluna.

“Pluna’s troubles appear to have been mounting recently as local news reports indicated the Uruguayan Government aimed to seek new private investors for the carrier as it recorded as USD18 million loss for the eight months ending in Feb-2012, although the carrier after years of losses had achieved break-even. The Government holds a 25% stake in Pluna while Latin American Regional Aviation Holdings (LARAH) accounts for the remaining 75%. Canadian regional operator Chorus Aviation is a 33% owner in LARAH,” CAPA shared about Pluna in 2012.

“Local media reports indicate the Government has also recently indicated its desire that LARAH sell off its stake in Pluna to allow other investors to invest in the carrier, which reportedly requires a cash infusion of USD30 million. The Uruguayan Government sold its majority stake in Pluna to investment fund Leadgate in 2007, and around that time Pluna began a restructuring that included the elimination of medium- and long-haul services and larger gauge aircraft. Pluna set up a hub at Montevideo as a transfer centre for traffic from lower South America, and now serves destinations in Argentina, Brazil, Chile and Uruguay with 13 Bombardier CRJ900s.”

The aftermath

Canadian regional airline Jazz held 25% of Pluna’s stock. A private consortium of local and international investors called Leadgate owned the remaining 75% of the shares. This group transferred its stock back to the government of Uruguay. Then, on July 5th, 2012, the state decided to suspend Pluna’s operations due to the failure to find an investor and the related strikes.

The government didn’t waste any time selling off Pluna’s assets. Seven of the airline’s CRJ900s were put on auction that fall, which were eventually acquired by Spain’s Cosmo Airlines.

Pluna CRJ
The CRJ900 is praised for its ability to perform well on regional routes, and Pluna sought to take advantage of this aspect with its many short and medium-haul flights across South America. Photo: Eltony via Wikimedia Commons

The airline flew numerous aircraft types in its long history. In more recent decades, the likes of the ATR 42, Boeing 767, DC-8, and DC-10, and even the Lockheed L-1011-500 Tristar all helped the airline maintain its global operations.

A different market

Another Uruguay airline, BQB Líneas Aéreas, ceased operations in 2015. So, over the last decade, Uruguay has lost two of its home-based carriers. Alas-U and Amaszonas Uruguay have tried to fill the gap. However, it’s mainly international carriers such as LATAM that dominate the country’s space in the current era.

This is an aspect that is looking to prevail in this next chapter. For instance, Iberia recently increased its frequencies to Uruguay. Moreover, the country is one of several South American nations that has had its regulatory and competition authority approve Delta and LATAM’s joint venture. The partnership saw over 20 international routes be added to their agreement this week, and Montevideo is a key feature of LATAM’s regional network.

It’s been 85 years since Pluna began flying and nine years since it ceased operations. However, the carrier will be well remembered in the Uruguayan aviation scene, representing the country for over eight decades.

Overall, what are your thoughts about the history of PLUNA Líneas Aéreas Uruguayas? What do you make of the airline’s journey over the years? Let us know what you think of the carrier and its operations in the comment section.