DALLAS — Indicators for the commercial aviation sector have at last steadied following one of the worst economic downturns in recorded history—the COVID-19 pandemic. As a result, airlines have relegated survival in periods of weaker demand to a secondary priority, and the time has come to concentrate on long-term fleet and route network expansion.
South America is one of the regions with the highest passenger traffic, demand, and capacity data. Airways spoke with Thibaud Morand, General Manager for Europe and South Pacific of LATAM Airlines Group (LA), at the 2024 International Tourism Fair of Madrid (FITUR), to see how these trends may affect the airline’s future route structure, the largest on the continent.
LATAM Airlines Today
On June 22, 2012, the LATAM Airlines Group was established following the completion of one of the largest mergers between the Brazilian TAM Linhas Aéreas and the Chilean carrier LAN Airlines. The goal of the merger was to create a single, cohesive organization for the airline industry in Latin America.
The group currently operates a vast network with 13 domestic and 182 international destinations spread across 26 countries, and it owns a fleet of more than 330 aircraft. Presumably, it is the flag airline of South America, with Aerolíneas Argentinas (AR), Avianca (AV), Copa Airlines (CM), and Aeroméxico (AM) being its main rivals.
LATAM employs a multi-hub airport strategy, with two primary intercontinental hubs, Santiago (SCL) and Sao Paulo (GRU), and two subsidiary hubs, Quito (UIO) and Bogota (BOG), the latter two serving as the hubs for local flights connecting all potential South American towns.
Thibaud Morand claims that the Latin American market is back on track. In terms of capacity, the carrier is already doing better than it did in 2019, and numbers have rebounded one year sooner than anticipated.
A New Link: Madrid to Bogotá
“We are an airline group,” Morand said, “unlike our competitors, who are normally associated with a single country. We are not going to privilege Chile or Brazil over others.”
Colombia has remained the sole member of the airline group without a nonstop connection to Europe. As a result, on July 3, 2024, LA will begin operating a new service between Bogotá and Madrid. However, the Colombian LA subsidiary will not operate this new route—the first transatlantic link from Colombia.
Rather, it is going to be a component of a fifth-freedom service that leaves Santiago International Airport (SCL) and stops at El Dorado International Airport (BOG) en route. The larger Chilean LA Boeing 787 aircraft will strengthen the SCL-BOG link, and the Colombian LA subsidiary will continue to operate without any long-haul aircraft.
Instead of being promoted with Madrid as its final destination, flight LA710, which departs from Santiago, will have many more connections to the interior of Bogotá and Ecuador. Thibaud Morand explained: “Given that we have up to 10 non-stop weekly frequencies between Madrid and Santiago de Chile, it does not make much sense for us to push passengers to fly to Spain via Bogotá.”
Joining the Largest Latin Transatlantic Airbridge
Currently, the largest airbridge in Latin America spans the Atlantic between Bogotá and Madrid. No less than five airlines—Air Europa (UX), Avianca (AV), Iberia (IB), Plus Ultra (PU), and of course, LA—will be flying this route in the summer of 2024.
As a result, this airbridge boasts one of the most competitive routes across the Atlantic, so it will be interesting to see how LA moves forward to seamlessly connect to the transatlantic airbridge and take up a significant portion of the demand once the route begins to operate.
“The capacity offered between Madrid and Bogotá is impressive,” stated Morand. “Spain and Colombia are the most important industries in all of Europe and South America, so there is a significant demand opportunity. We have a subsidiary, LATAM Colombia, to which we want to contribute more to its domestic flights and its great connectivity to the United States.”
Until recently, LA was a member of the oneworld Alliance, which allowed for seamless collaboration with partner airline IB. However, since 2020, LA has lost all its bonds for nonstop flights to Bogotá after exiting the alliance, forcing it to search for a connection on its own.
What About LATAM Colombia?
Since its founding in May 2016, the LATAM Airlines Group has not added a single aircraft to LATAM Colombia, with IATA code 4C, despite the carrier’s outstanding performance in the country, which includes 24 routes out of BOG and 10 more connections out of Medellín (MDE). Furthermore, no flight departs from BOG or MDE bearing flight number 4C; instead, it takes off with the Chilean AOC, LA.
The initiation of nonstop flights to Madrid may have presented LA with a favorable prospect to augment its fleet, given that the group received delivery of its twenty-first Dreamliner in December 2023 and made an additional order for five Boeing 787 units in December of last year. However, LATAM Colombia is still a subpar brand that the rest of the group completely controls today.
“This is the fun of how we operate as a group,” explained Morand. “By having five subsidiaries, we have a lot of flexibility, and for the passenger, it makes no difference whether the flight is a 5th freedom or not. The planes are the same, and the product is the same.”
Apart from the viewpoint of travelers, the presence of the Colombian flag carrier AV at BOG plays a significant role in shaping LA in Colombia. Regarding the percentage of flights each airline is allowed to operate out of the capital city, both airlines are embroiled in bitter legal disputes.
The Colombian judiciary rejected a petition from AV in December 2023, accusing LA of unlawfully obtaining slots at the Colombian hub.
Five Nations, Five Liveries
LATAM Airlines debuted an assortment of aircraft with unique liveries that reflected the national colors of each participating country on January 11, 2023. These five Airbus A320neo aircraft were introduced with the Brazilian flag colors depicted on the tail logo (PR-XBG).
Thibaud Morand explained: “The meaning behind these liveries is to enhance local pride and to show that we are a very important operator in each country. It is a very beautiful play of colors that reflects our essence and our deeply South American identity.”
Morand also reaffirmed that this is only a symbolic move that does not intend to cover all of its subsidiary’s fleets with flag shades. The special livery will only be applied to one Arbus A320neo in each nation, for a total of five. There are no immediate plans to include the Boeing 787 Dreamliner on the list either.
Given the significance of Spain’s culture to the people of South America, LA refuted any rumors that Spain might join this movement as well.
Long-Term Plans for Africa and Oceania
Lastly, let’s shift our attention from Europe, our top client, to LA’s long-term goals in Africa and Oceania, two more important continents.
“The South Pacific is a very interesting market,” Thibaud Morand remarked. “It is a very important market during the peak season for travel to Antarctica and the Australian mining industry. As well, there is a lot of student exchange.”
As of this writing, LA operates 10 weekly flights to three locations in Oceania: Sydney (SYD), Auckland (AKL), and Melbourne (MEL), which will resume service in March 2022. The general manager made it clear that although the current connection is made with a fifth-freedom stop at the Kiwi city, the airline is now looking into the possibility of starting nonstop flights from Santiago to Sydney again.
Further, LA has restored nonstop service between Sao Paulo (GRU) and Johannesburg (JNB) in Africa; however, there are currently no intentions to extend service eastward into this continent.
Although not mentioned by the airline group, the capital of the former Portuguese colony of Angola, Luanda (LAD), has strong cultural and economic ties to both Brazil and Portugal and could be a suitable choice to complete a global route triangle linking these three nations.
Featured image: LATAM Airlines