The future looks bright


In spite of concerns regarding certain currencies in the region and regulations that hinder the flow of imports into some countries, there is an air of confidence in Latin America as free trade agreements with Asia promise growth. One airline in particular is investing to further boost its competitive edge


A


ccording to Cristián Ureta, CEO - cargo business at LATAM Airlines Group: “Latin America’s air freight market is stable this year. Despite not registering positive growth, it has


weathered the European crisis very well. “Brazil is not growing at the rates we saw in


2010 and 2011, though the economy remains dynamic, especially in the domestic market. Chile, Peru and Colombia are moving forward with strong investment plans that will help drive growth in the air freight business.” Argentina has suffered some problems and restricted imports, but is now improving.


“Overall the market is very dynamic and


requires a high level of flexibility, and our cargo group sees this ability as the key to its future suc- cess,” he added. LATAM, the product of a merger between


Chile’s LAN Airlines and Brazil’s TAM Linhas Aéreas (ACW, 2 July, p3), is projecting signifi- cant growth rates for its air freight business in the coming years. Through the merger, it is hoped that over US$100 million worth of syn- ergies can be achieved – and the advantages for customers are “enormous”, Ureta stated. He explained: “We have an exceptional dis- tribution network both in Brazil and the region,


which will play a key role in boosting our competitiveness. LAN and TAM have comple- mentary networks that can be combined very effectively in order to boost load factors and significantly improve inbound cargo. “For example, asparagus


from Peru, flowers from Colombia and fresh fish from Chile will now benefit from more routes, more flights and higher capacity in order to expand and streamline their distribution to the region and the rest of the world. “The operation will be complemented by


the air freighters of LAN Cargo and its Brazil- ian subsidiary ABSA, which will strengthen the cargo network in Brazil and make it possible to implement the business model that has been very effective at LAN.” Ureta went on: “Later this year we will take


delivery of two new Boeing 777 freighters, which are the most efficient aircraft of its type, which will join our current fleet of 14 freighters and will play a key role in expanding and devel- oping the regional market for destinations such as the United States, Europe and Oceania. “The last-generation freighters, the 767s and


777s, are the most efficient aircraft on the routes we operate,” he pointed out. In addition: “Our infrastructure and tech-


nology will be crucial for improving efficiency and service, while the integration of our teams, which have a high level of commitment to the customer, will give us a special edge.”


As well as investing in its main hubs such as


Miami, Santiago, Bogotá and Manaus, the car- rier is currently working on projects at São Paulo’s Guarulhos and Congonhas airports. Ureta said: “We are investing in technology,


particularly in e-freight and the electronic flight timetable. We plan to reach 25 percent e-air waybills in our network within one year and the level of 100 percent planned by the industry by 2014.” LATAM plans to focus on growing the


domestic air freight business in Brazil via a model based on integrating the cargo and pas- senger aircraft networks; improving sales on routes with stronger demand while stimulating demand on routes with available space; increas- ing load factors on flights from Europe and the US to Brazil by better co-ordinating hubs and optimising the available cargo capacity; increas- ing load factors on flights in the region and on flights exporting goods from Brazil; and effec- tively connecting the cargo coming from Colombia, Peru, Ecuador and Chile, to Brazil.


GSA points to Brazilian currency concerns


Mark Thiermann, director of GSA GrupoPFS, considers: “I believe the main concern throughout South America is the devaluation of the real in Brazil. We must remember that Brazil is the largest importer of goods by air in the region, so if the real continues to lose value to the dollar, we might see a drop of imports (and increase of exports) and thus fewer freighters for the return from the rest of South America. “But this is far from happening in the short term and we


have to wait and see what countermeasures the Brazilian government will put in place to stabilise the real. “Luckily, the fuel prices are starting to behave better, giv-


ing our airline partners a little breathing space, but I would not bet on the permanence of the fuel prices,” he added. One bright spot on the horizon is the possibility of


increased trade between South America and Asia. Although volumes are still low on those routes in compari-


son with traffic between Asia and the US or Europe, demand is steadily increasing and the signing of new free trade agree- ments between some South American countries and Asian countries could well lead to an acceleration in volumes on the sector in the coming years, Thiermann believes.


Thiermann highlights free trade agreements with Asia


Page 8


23 July 2012


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