LATAM—All of Latin America under one roof

LAN and TAM, two of Latin America’s most heritage-rich air­lines and long­standing customers of MTU, appear as the new LATAM brand after merging.

05.2016 | Text: Andreas Spaeth

Text:
Andreas Spaeth has been traveling the world as a free­lance aviation journalist for over 25 years, visiting and writing about air­lines and air­ports. He is frequently invited to appear on radio and TV pro­grams to discuss current events in the sector.

LAN is the abbreviation for Línea Aérea Nacional de Chile and was introduced in 1932 for the Chilean airline founded three years earlier. At the time, flying in Chile meant traveling in single-engine biplanes like the De Havilland Gipsy Moth. TAM stood for Táxi Aéreo Marília in 1961 and was initially a small Brazilian air taxi operator. Both companies grew to become the biggest and most important air­lines of Latin America, dominating the markets of their respective home countries. Each carrier was run by a strong dynasty: TAM, always privately held, by its patriarch Rolim Amaro (deceased in 2001) and his family, and LAN, after privatisation in the 1990s, by the Cuetos, who had made a fortune exporting canned fruits, among other ventures. Since 2002, prospering LAN expanded beyond Chile and established af­filiates in neighbouring countries, some­times through the acquisition of local air­lines. Since 2004 LAN stood for Latin American Network, and despite being registered in Chile, Peru, Ecuador, Argentina and Colombia, its aircraft flew under the unified LAN brand. After remaining a purely Brazilian domestic airline for long, TAM expanded its route network to the USA in 1997 for the first time, followed by European services in 1999.

Already in 2012, the merger of both airlines was executed, although they kept flying under their respective well-known brands, but under the roof of LATAM holding. LATAM claims around 30 percent market share for flights within and to and from Latin America, and is among the ten biggest airline groups in the world. In 2015, it carried almost 68 million passengers to 140 destinations in 24 countries on its fleet comprising 328 air­craft at last count. The network around Latin America is extremely dense with 117 destinations served. At least as impressive is the freight arm LAN Cargo, even serving 144 airports in 26 countries. In total, about 53,000 employees work under the roof of LATAM. Currently Latin America’s biggest market, Brazil, faces tough times because of the recession, the deteriorating currency and high duties imposed on aviation. “Due to the size of Brazil, its dire situation is impacting the entire Americas region, airlines in Brazil had combined losses of nearly 400 million U.S. dollars in the first half of 2015”, complains IATA, the association of scheduled airlines. LATAM suffered a decrease of domestic passengers in Brazil and other countries in the region by four percent, which was compensated however by an equally big growth in international traffic.

Usual picture Until now, the airlines of each member of the LATAM group flew under their own colors. As of 2016, the aircraft will be repainted in a uniform livery.

2016 is a special year for LATAM: In August the Games of the XXXI. Olympiad will be held in Rio de Janeiro towered over by Sugarloaf Mountain. Before that, the merger of the former brands LAN and TAM into a common new LATAM identity will be executed. Until 2018, all aircraft are expected to fly with the new LATAM livery, the name of individual countries will no longer appear, exactly like LAN had introduced it suc­cess­fully in its own group. The new logo in coral and red on an indigo back­ground, which was unveiled in 2015, is supposed to be a compromise in colours and style between the existing brands. “The new brand is born from the desire to capture the best of both identities and legacies and consolidate them to create an even stronger one, an essence that is truly Latin America,” explains Mauricio Amaro, president of the Board of Directors. In contrast to other groupings such as Air France/KLM or IAG (British Airways and Iberia), whose air­lines continue to fly with separate identities, LATAM has conducted studies in ten countries, with results encouraging the incorporation into one single brand. “This is the first time that an airline group has decided to consolidate under one single brand, and the first time a Latin American group aspires to be one of the best in the world,” says Amaro. About 40 million U.S. dollars will be the cost of the re­branding, mostly for changing the liveries of over 300 air­craft.

Nr. 8 With 328 aircraft and nearly 68 million passengers in 2015, the LATAM Group ranks among the world‘s ten largest airlines.

Source: Latam, Ascend Database

LATAM is focusing mainly on Airbus jets, cur­rently about 250 air­craft of over 300 to be operated by the group soon come from the European manu­facturer. TAM is the launch customer for the Airbus A350 in Latin America, the first scheduled service took place in early 2016. A total of 27 A350-900s and -1000s ordered by TAM are destined to replace older A330-200s. LAN in turn was the first operator of the Boeing 787 in Latin America in 2012, in total the Dreamliner fleet will be consisting of 32 787-8s and -9s. Both air­lines together also boast a fleet of 43 Boeing 767-300ERs. Under the common brand, both the fleets and the route net­work will be further stream­lined. The vision is clear: “LATAM created a unique partner­ship in the industry that resulted in the largest air­line group in the region,” says CEO Enrique Cueto, “LATAM will be a brand that builds a culture dedicated to taking care of its clients.”

Interaktivität

LATAM-Hubs in Latin America

Choose an airport:


Population in million Passengers / year
11,838,9Source: Aeroporto Internacional de Guarulhos
6,116,1Source: 2014, Vinci Group
7,825,0Source: 2013 estimated, El Dorado International Airport
8,815,6Source: 2014, Aeropuerto Internacional Jorge Chávez



Global passenger air traffic, February 2016


Source: IATA

New design for LATAM

After the merger between LAN Airlines, TAM Airlines, and all their respective subsidiaries formed the new LATAM brand, the creation of a new, uniform aircraft design for the LATAM Airlines Group was high on the agenda. The first flight with the new post-merger paint scheme departed from Rio de Janeiro on May 1 en route to Geneva. Two days later, the LATAM-branded aircraft returned to Brasilia with the Olympic torch safely on board. Starting in Brasilia, the Olympic Torch Relay will pass through more than 300 Brazilian cities. LATAM will rebrand 50 aircraft by the end of 2016 and expects to finalize the fleet-wide rebranding process by 2018.

Inside MTU MTU at LATAM’s side

Well-traveled The LATAM Group‘s V2500 and GE90 engines fly to Hannover for maintenance. Here, they wait for a test run at MTU Maintenance before they return to service somewhere in Latin America.

An important factor in the suc­cess of LAN and TAM has always been MTU Maintenance, which has been main­taining the V2500 engines of the TAM A320 family air­craft since 1999 and since then also has been looking after the GE90 engines of the Boeing 777 fleet. Until 2013, LAN operated a fleet of Airbus A318 jets with PW6000 engines, partially developed and as­sembled by MTU.

“We constantly extended the cooperation,” says Christoph Heck, Vice President Sales The Americas at MTU Maintenance, who has been in close touch with the customer since a long time. “MTU is proud to have contributed to this success story. The merger doesn’t change anything for us, as we have long-standing excellent contacts with both air­lines and continue this,” ac­cording to Heck. The V2500 engines are ferried by air cargo from São Paulo and Santiago to the facilities of MTU Maintenance in Hanover. “The customer is rewarding the efforts of the whole team here,” enthuses Christoph Heck.

ENGINES IN USE AT LATAM

GE90

GE90 Air freight giant
Since the beginning of this year, MTU Maintenance has been re­sponsible for maintaining the GE90 engines that power LAN’s fleet of B777 air freighters.

GE90

GE90 Air freight giant
Since the beginning of this year, MTU Maintenance has been re­sponsible for maintaining the GE90 engines that power LAN’s fleet of B777 air freighters.

V2500

V2500 Backbone of the A320 fleet
TAM is one of the biggest customers using the V2500 to power its fleet of A320s. MTU is a partner in this engine program, and MTU Maintenance has been providing MRO services for this engine since 1999.

V2500

V2500 Backbone of the A320 fleet
TAM is one of the biggest customers using the V2500 to power its fleet of A320s. MTU is a partner in this engine program, and MTU Maintenance has been providing MRO services for this engine since 1999.

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