From South America to the world
The Latam Group’s history goes back to 1929, when its Chilean part LAN was founded. It was privatised in the 1990s and then merged with Brazil’s TAM in 2012. Today it is the largest freight carrier in Latin America. What are its prospects for the future? Chief executive officer Andres Bianchi, who has worked for the airline for 15 years, elaborated to ITJ editor Andreas Haug recently.
You’ve been CEO of Latam Cargo since April 2017, Mr Bianchi. As a half Chilean, half Colombian yourself, you know well about what crossing borders represents for Latam Cargo.
The Latam Group’s registered office is in Santiago de Chile, but Latam Cargo itself is based in Miami FL (USA), where most of our operations take place. About 90% of our US traffic is bundled there, and all our full-freighters that connect Europe fly via MIA.
Latam Cargo has connected Chicago IL (USA) directly to South America since February this year (see also page 14 of ITJ 5-6 / 2019). Is the Floridian airport no longer sacrosanct for your company?
The Santiago – Chicago connection is the first one to bypass our Miami hub, you’re right. We established it to improve and speed up our services for Chilean exporters reaching out to large markets in midwestern USA. On top of this, Chicago also offers better connections to many Asian markets. The service has turned out to be very successful and could serve as a model for other connections, for example to the west coast of the USA – especially as we’re in the process of adding extra capacities with new aircraft in the second half of this year.
What kind of units are you bringing in?
A second converted Boeing B767F in July, and a third one in December. That’ll be the last one for the time being. We’ll then have eleven B767-300Fs in our fleet.
What are their new destinations?
In June we added the first Scandinavia–South America link to our network, when we started serving Copenhagen. The flight continues to São Paulo VCP, Montevideo, Santiago as well as Quito from the Danish capital, which is a strong hub in terms of the pharmaceuticals industry, automobile parts supplies and the oil and paper industries. On the way back, the freighters stop over in Miami and Brussels.
In addition, our plans to operate a joint venture with IAG were recently given the green light by the Chilean authorities. This new trans-Atlantic partnership will be followed in 2020 by an intra-Americas partnership with American Airlines.
What is your assessment of the overall business conditions for Latam?
After an excellent year in 2018 demand has now declined somewhat – actually by rather more than we’d expected, in some cases. Some of our South American destinations were already under pressure from the global economic slowdown before this, but they additionally suffered from some regional domestic crises, such as the ongoing problems in Argentina. At least northbound traffic is as strong as ever.
2019 was initially more difficult than expected, but I remain cautiously optimistic for the rest of the year. We need to monitor developments at national levels. We simply have to wait and see whether the consumer mood in Brazil brightens or not, for example.
How important are individual markets?
Brazil accounts for approximately 60% of the imports that we handle. Chile has overtaken Argentina, in the meantime, which in turn is followed by Colombia. In the opposite direction, Colombia and Ecuador are very important in terms of exports, because of the flower industries there, as are Chile and Peru.
What are Latam Cargo’s strengths?
We don’t consider ourselves a big player that connects its home continent to every global region. We’re a specialist with a robust product portfolio in South America. Since perishable goods from there are in great demand worldwide, we naturally specialise in handling them.
What are your aviation group’s key assets on the import side?
High-quality products as well as more and more pharmaceutical goods. We were the first airline in the Americas to be certified in accordance with CEIV Pharma.
