Ultra Air Struggling To Stay Aloft, Make Payroll
Ultra Air, Colombia’s other Low-Cost Aviation startup, also started by Mexican entrepreneur William Shaw, has reduced its flight operations to three aircraft, from six, as it faces a cash flow crisis. This comes less than a month after competing airline Viva ceased operations in the midst of a restructuring attempt.
Colombian airlines are being affected by a liquidity crunch caused in part by the plunge in the Colombian peso. The airlines must charge domestic fares in pesos, which are trading at almost 30% lower than one year ago, but pay for fuel and aircraft financing charges in dollars. Well capitalized airlines have investment backers to keep their airlines liquid, but startups and young carriers are in a more challenging situation.
Finance Colombia has reached out to Ultra, which so far has not responded.
In an internal message, Ultra told employees: “With respect to payroll, we tell you that we are managing the resources to comply with payment, like we always have done, through a disbursement from our financial entity, for which it is probably that we have to move this obligation to the end of the month.”
“We understand the negative effects that this causes, but we are grateful for your accommodation, understanding, and support.”