2023-09-22 16:06:00
From receiving a Guinness record for the longest route in 1995 to facing fierce competition and regulatory changes. Discover how the fortunes of this emblematic Peruvian transportation company changed. Credits: TikTok @cesaribarra2023
The Ormeño transportation company, once a benchmark on the roads of Peru and South America for its advanced fleet in times prior to the 21st century, gradually lost relevance due to technological updating in the industry. Their buses originated in Peruvian territory and traveled long distances to connect with countries such as Chile, Colombia, Venezuela, Bolivia, Argentina and Brazil.
Joaquín Ormeño Cabrera, founder and top leader of the organization for three decades, made a decision that turned out to be crucial for the company’s future decline. The fame of Don Joaquín, as his employees called him, increased in 1977, when he decided to expand the route of his buses and be the first to acquire double-decker vehicles to begin the route from Lima to Buenos Aires.
Thirteen years later, he decided to expand his business and, to do so, acquired a 17 thousand square meter plot of land that previously belonged to the brothers Mario and Pedro Brescia. In 1990, this space was occupied by the Fiat company, specialized in vehicle assembly.
The Ormeño transportation company, once a leader in routes through South America, faces its twilight following decades of successes and failures. A look at the crucial decisions that marked his destiny. Composition: Infobae Peru
The Ormeño company received the Guinness record in 1995 for carrying out the longest route traveled by a passenger bus, covering 9 thousand kilometers. The journey began in Buenos Aires, Argentina and ended in Caracas (Venezuela).
Several factors played a crucial role in the fall of the Ormeño company. In 1990, a law was implemented that liberalized the routes, allowing anyone with a bus to offer public transportation services. This triggered fierce price competition, with newcomers often offering lower rates than established companies such as Cruz del Sur and Ormeño.
Ormeño, in its early years, operated with a high-end fleet in Peru, with buses that cost up to half a million dollars, compared to the informal ones that acquired second-hand vehicles in the United States for only five thousand dollars.
Don Joaquín’s company had prospered under a regulated system in which concessions and prices were controlled by the government through the Ministry of Transportation. However, the company suddenly found itself competing with a growing number of competitors. Adapting to these changes was complicated, and the organization suffered a decrease in the quality of its fleet, as new vehicles might not be purchased due to lower passenger demand.
Historic Center of Arequipa – Peru – September
According to the ‘Busco Bus’ portal, the price on the Ormeño bus routes were varied according to the route you were going to take, for example:
Lima – Chiclayo
Chiclayo is a city in northern Peru that usually encompasses a lot of fishing activity and is widely visited by those who love warm and colorful environments, especially for its colonial architecture. Tickets from the capital to the northern city cost between 30 and 40 soles. The Ormeño company had two types of services: Executive and Standard.
Lima – Arequipa
This was one of the first routes offered by this company and is one of the most important due to the great tourism and commerce in Arequipa, the famous “white city.” The price of this service was 50 soles for a trip of almost 17 hours.
The Ormeño company achieved international fame before being overtaken by technological advancement and a series of financial problems. Let him know the factors behind his disappearance. Credit: Andina
2011 marked an initial blow for the company, when the National Superintendency of Tax Administration (Sunat) carried out an operation that revealed that the Ormeño business group owed 76 million soles. Sunat seized a property in Tacna and three buses that were later recovered following negotiations and efforts by the company’s directors.
As the 20th century progressed, Ormeño’s fleet was drastically reduced, marking a turning point in the company’s history. This fall coincided with the death of Don Joaquín Ormeño in 2019.
According to Cesar Barra on his Tiktok channel @cesaribarra2023, Ormeño’s crucial mistake was betting on long routes as the future of transportation, while airlines positioned themselves as leaders in the passenger market on international routes.
After the death of the founder, the company passed into the hands of his eldest son, Luis Joaquín Ormeño Malone, who was at the helm for a year before his death in 2020. The company was left in the hands of the second son, Julio César Ormeño Malone, who He had served as head of operations maintenance, but he did not have the same fate as his father to run this interprovincial route business.
However, the most devastating blow for Ormeño and many other companies worldwide was the COVID-19 pandemic, which buried this international transportation organization, appreciated by both Peruvians and Latin Americans.
The life and legacy of Joaquín Ormeño Cabrera, the visionary behind one of the most important transportation companies in Latin America and how his death marked the beginning of the end for the organization.
César Barra not only shared the history of the company with us, but also tells of his experience working with Don Joaquín Ormeño. According to the tiktoker, the founder of the company, he was considered a pioneer in interprovincial passenger transportation by the former president of the Republic, Fernando Belaúnde Terry.
The liberation of routes in Peru had a series of significant effects. This regulation led to a drastic increase in the bus fleet in Lima and Callao, reaching 48 thousand units in circulation. Technical inspection systems were eliminated and the use of taximeters was cancelled. In addition, free fares were established on all bus routes and the importation of used vehicles for both public and private transportation was allowed. The importation of used auto parts was also legalized.
The taxi market was flooded with station wagons with the steering wheel on the right side, especially in Tacna. The public company Enatru, which operated articulated buses and feeding systems similar to the Metropolitano, was controversially privatized. This liberalization of routes also led to the proliferation of informal interprovincial terminals, which sowed the seeds of many of the problems that continue to plague transportation services to this day.
Learn regarding the companies that operate within the Peruvian territory and remain current according to the redBus page:
Cruz del SurCivaOltursaMóvil BusPeruBusExclucivaTepsaLineaAnshelitusAndoriña ToursApocalipsisZ-Buss
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