Will Ecuatoriana arise from the dead?

If some Ecuadorean investors have their way, Latin America's most colorful airline will fly again:

The name sounds familiar, but it has nothing to do with one of South America’s best-known carriers, Ecuatoriana de Aviácion, Ecuador’s largest aviation company until it stopped flying in 2006.

An initiative of the country’s entrepreneurs, Ecuatoriana Airlines was registered with the National Civil Aviation Council (CNAC) of the South American country in late August and intends to launch services from the Mariscal Sucre International Airport, in Quito.

According to the application sent to CNAC, the new airline plans to serve the cities of Coca, Cuenca, Esmeraldas, Guayaquil, Loja, Macas, Manta, Quito, Santa Rosa and Tulcán. The fleet of the new Ecuatoriana is not defined, but the company is evaluating the ATR 42-500 and Dash 8-Q200 turboprops and the Airbus A319 and A220 jets and its competitor, the Boeing 737 in the 300, 400 or 500 variants.

Ecuatoriana’s share capital, however, is only $ 16,000, 99% of which belongs to a foreign investor, the Ecuadorian press revealed – the company’s partners are Eduardo Delgado and Ann Martillo.

A few thoughts here: 

• Given my (admittedly three-decades-old) experience with Ecuatoriana, my first thought was "Cool! Now a whole new generation of travelers to Ecuador will get to experience fearing for their lives in heavy turbulence and having their flights summarily canceled."

• The airline's proposed destination list indicates that the new Ecuatoriana will be entirely domestic and, interestingly, will not fly any routes to the Galápagos Islands, even though they are popular with tourists and are financially lucrative. 

• $16,000 in share capital isn't going to buy a lot of airplanes, but that may be a typo. This article (in Spanish) claims that the airline has lined up $15.84 billion in foreign capital and $160 million in domestic capital. 

This filing comes amidst an unsettled civil aviation situation in Ecuador:

The Ecuador market is up for grabs. In May, the Ecuador government put TAME Ecuador, the former State carrier, in liquidation. Two of the other airlines that operate in the country, LATAM and Avianca, started reorganization processes under Chapter 11 in the US. Therefore, there could be a void left by these carriers, and a new airline could develop it in the post-COVID world.

State-run TAME had been struggling for awhile; the Coronavirus pandemic was the 58-year old airline's death knell. This left Ecuador without a true a flag carrier, as Avianca Ecuador and LATAM Ecuador are both subsidiaries of parent airlines based in Colombia and Chile, respectively, and face uncertainty of their own. So it certainly makes sense to set up a new airline - if only on paper for now - to fill the gap left by TAME and to take potentially take advantage of problems at Avianca and LATAM.

Obviously, the new Ecuatoriana won't begin flying anytime soon; even if it were possible to do so, it would be foolish to start operating a new airline in the middle of the pandemic. And, it goes without saying that in order for the new Ecuatoriana to be successful, it will need to be run much better than its infamously unreliable state-owned predecessor.

But if Ecuatoriana 2.0 does ever (literally) get off the ground, they could do worse than to bring back the old color scheme.