Itapemirim Delays Wage Payments a Month Into Operations

A month after starting its operations, Brazil’s newest airline startup, Itapemirim Transportes Aéreos, has delayed wage payments to its employees, according to a report by O Estado de São Paulo newspaper, based on internal sources.

The periodical says that wage payments have been delayed “by two to five days,” while other benefits such as meal tickets and daily allowances had delays stretching up to three months, though the values were settled a day before the publication of the report.

The worries surrounding the working conditions at ITA, as the company is also called, triggered the National Union of Aeronauts to call a meeting with associate members that work at the airline on the Friday before.

Other complaints, O Estado de São Paulo says, range from a lack of communication between employees and leadership to the lack of knowledge about the payments agreed, as there were no specific values settled in advance.

“In the work contract,” it says, “there is only a reference of what the variable part [of the salary] will follow the remuneration policy of the company.” An employee told the newspaper that the massive unemployment in the sector, triggered by aftereffects from Covid-19 but also by the failure of Avianca Brasil in 2019 caused employees to accept these conditions.

Itapemirim, as per the latest Planespotters.net data, is currently operating four Airbus A320-200s. All are configured for 162 passengers. The website informs that another 11 of the model are due, as well as two Airbus A319s.

The airline told Folha de São Paulo newspaper that a “‘technical problem kept the company from centralizing the payment of its employees in a single bank,” triggering the delays. ITA also said “all employees were informed about the matter” and that the “last payments were settled on Aug. 10.”

Another issue raised by the sources of O Estado de São Paulo is that “sometimes, the payments are made through PIX [a type of bank transfer in Brazil] by companies that make part of the [Itapemirim] Group, such as Viação Itapemirim and Viação Caiçara, but not by ITA.”

Daniela Rocha Silva, the marketing director of the group, said all transactions are registered in the group’s balance sheet. However, both companies mentioned are connected to Itapemirim Group’s judicial recovery process, the Brazilian equivalent of Chapter 11 bankruptcy.

ITA is not included in the process. However, creditors have been complaining that settlement funds are being shifted to the airline venture, which has already burned 42.5 million reai ($8.10 million) of the holding company’s funds, says O Estado.

Since February last year, the owner of Itapemirim Group, Sidnei Piva de Jesus, had claimed that investors from Abu Dhabi would put $500 million in the group. Among other ventures, the cash would serve to start up the airline. So far, the money has never arrived and no further details about it were disclosed, so all funds to start the airline came from the group. This is what unsettles the creditors, some of which also complaining about payment delays.

A report by VEJA magazine’s Radar Econômico section says EXM Partners, the judicial manager of the bankruptcy process, suggested adding a “watchdog” to monitor the groups’ movements in order to safeguard the creditors’ interests. The group defended itself by answering that EXM already employs one, claiming that, by doing such a request, “[it] only wants to turmoil the group’s exit from the judicial recovery process.” Itapemirim petitioned its exit in May.

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João Machado

João has loved aviation since he was six-years-old when he started visiting his home airport in Porto Alegre, southern Brazil. As he always loved writing, in 2011, at age 10 he started his very own aviation blog. Many things have happened since then, and now he is putting all his efforts into being an airline executive in the future. João currently lives in Siena, Italy, where he studies Economics and Management at Unisi.

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