Avianca Holdings has announced it will phase out its Embraer (EMB, Sao Josa dos Campos) fleet as part of its six-pillar restructuring plan.

The carrier said in a 4Q18 earnings report that with the retirement of ten E190s, it would take a one-time, non-cash impairment charge of USD38.9 million, representing the aircraft's overall estimated residual value. Eight of the jets are currently in service for Avianca (AV, Bogotá) of which seven are operated by TACA International Airlines (TA, San Salvador Int'l) while one is operated by Avianca Costa Rica. The remaining pair are leased out to Aerolitoral (5D, Monterrey General Mariano Escobedo).

"It will benefit efficiencies, will drive also our customer experience and will standardize also our maintenance, training and operations in regards to our narrow-body fleet. So this is a very important decision we’ll be taking at this moment for the future of the company," Chief Financial Officer Roberto Held Otero said.

Chief executive Hernán Rincón later added that Avianca Holdings would aim to reduce its overall fleet from the current 190 aircraft to "between 160 and 165".

"I don't know if we're going to do that all in 2019," Rincon said. "It may take us a little bit longer to get to that point, but that's where we are targeting about."

In tandem with the capacity cut, Avianca will also remove non-profitable routes from its network.

The CEO also confirmed the Panama-based holding firm has now signed firm agreements over the sale of its stake in Avianca Costa Rica (which owns SANSA - Servicios Aéreos Nacionales) and La Costeña in Nicaragua. The transactions are expected to close in the first week of March. He also confirmed that talks over the merger between the holding and its franchisee Avianca Brasil have also been put on hold indefinitely given the latter's financial difficulties.