One year into its single, merged brand, Latam Airlines Group
hopes to become a bigger player on a global scale, both by extending its own international
reach and by forming new joint ventures that could be approved by the end of
this year.
While South American carriers Lan and Tam have been merged
and offering joint corporate contracts since
2012, they operated as separate brands until
last year and only this spring began to appear in passenger-facing forms,
including new uniforms and livery. Some integration remains to be done,
including next year's switch of Tam from the Amadeus reservation system to Sabre's,
which already houses Lan's reservations, said Pablo Chiozza, Latam senior vice
president of North America and the Caribbean.
Meanwhile, now that it covers South America with a single
carrier, Latam is looking to broaden its coverage, he said. In May, it began
service between Lima and Washington, D.C., its fifth destination in the United
States, and it's boosting service between Miami and Buenos Aires this year, he
said. The carrier also will begin service between Lima and Barcelona in
December and between São Paulo and Johannesburg in October, making it the only Latin
American airline group with regular service to Africa. Additionally, it is
adding regional flights, such as connections between secondary cities in
Argentina and Lima.
Within South America, corporate travel demand is
"stable and healthy," at least within the Spanish-speaking countries,
Chiozza said. "Argentina changed its government last year, and since then,
corporate travelers are resuming their trips to Argentina and we're seeing a
spike there," he said. "Peru and Chile are stable."
Economic woes are still stifling demand to Brazil, and the
carrier already has announced plans to
cut capacity between the United States and Brazil 35 percent year over year
in the second half of 2016. Even so, Chiozza said corporate travel demand in
Brazil has stabilized after its decline last year.
Beyond its own expansion, Latam is banking on pending joint ventures
with American Airlines, as well as British Airways and Iberia, both part of International
Airlines Group, to boost Latam's presence in global corporate programs. Both
joint ventures were announced at the beginning of the year. At the time, approvals
were expected to come ina year to 18 months, so either agreement could get the
green light by the end of this year. The American Airlines joint venture will
apply only to those countries with which the United States has Open Skies
agreements, including Colombia, Chile, Peru and Brazil, pending ratification
from Brazil's congress.
Qatar Airways, meanwhile, will invest $613
million to
acquire as much as 10 percent of Latam's shares, pending Latam shareholder
approval in September. Chiozza said that was a positive sign. "When someone
just announced their own company profit records and are investing in our
company, that says a lot about the opportunity they are seeing in us," he
said.