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Latam Envisions Broader Global Corporate Sales

By Michael B. Baker / 24 August 2016 / Contact Reporter

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.


Argentina changed its government last year, and since then, corporate travelers are resuming their trips to Argentina and we're seeing a spike there."

Latam's Pablo Chiozza

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.

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