Greater Than The Sum Of Its Parts Greater

Already operating over 300 aircraft, the airlines of the LATAM group today carry fully 50 per cent of the passenger traffic within the Latin American region. By 2018, the group expects its share to rise to two thirds. Internationally, LATAM operates to 137 destinations in 25 countries worldwide, with Africa due to join the network in October this year, subject to regulatory approvals. 115 of those destinations are within a one-stop connection from Santiago, the Chilean capital, to which LATAM and its codeshare partner Qantas both operate from Sydney.

LATAM’s daily Sydney-Auckland-Santiago flight on a Boeing 787-9 Dreamliner aircraft with fully flat business class beds in a 2-2-2 configuration and economy seats in a 3-3-3 layout is joined four times a week by a refit Qantas Boeing 747, with the Mark III fully flat Spacebeds in business class, premium economy in a 2-4-2 configuration and economy in a 3-4-3 layout.

“Over the past few years, we’ve successfully aligned the most extensive network in Latin America, implemented operational improvements, optimised our fleet use and introduced a renewed travel experience,” Patricio Aylwin, the airline’s managing director for Asia Pacific, tells Australian Aviation.

“And, in August last year, we announced that LATAM would be the new brand for LAN, TAM and affiliates, giving us the opportunity to create an airline group with a truly Latin American identity and a global presence.

LAN-TAM merger provides landmark opportunity in South American aviation

“This is one of the most exciting times in the group’s history,” Aylwin says. “The departure of the first LATAM-branded aircraft this year marked a significant milestone for everyone working at LATAM, and we’re finally approaching the ‘destination’ that we’ve been working towards for many years: one company with a single brand, a genuine Latin American culture and a global presence. ” Aylwin highlights the challenges of bringing together the multinational airlines of the LAN group from the Spanish-speaking side of Latin America with the Portuguese-speaking Brazilian airline TAM. “LATAM Airlines Group is the largest airline group in Latin America with LAN, TAM and affiliates now operating under a unified brand – LATAM Airlines. This has been an unprecedented project to bring together two airlines with distinct cultures and languages. ” “While it will be another three years until we are ‘100% LATAM’ with completely integrated processes and branding, we’ve already made extraordinary progress,” Aylwin says. “Not only have we aligned our teams, we’ve also implemented operational improvements, optimised our fleet, introduced a renewed travel experience and developed the most extensive and unmatched network in Latin America. ” “It was long an ambition to bring LAN and TAM together and create an airline group in Latin America capable of competing in the aviation big leagues,” Aylwin explains. “While mergers and take-overs are relatively commonplace in the industry, never before in the history of aviation have two airlines from different countries, with different languages and cultures, united under a single brand, leaving the previous names behind. ”

More than 50 aircraft are anticipated to be rebranded before the end of 2016. PATRICIO AYLWIN

“Since we merged in June 2012, we’ve been working tirelessly to integrate our processes, products and network. While the road hasn’t always been easy and we’ve had to overcome cultural, operational and regulatory challenges, which can often slow processes, I think we’ve made extraordinary progress,” Aylwin says.

“Although the change will be gradual and we still have another three years until we are ‘100% LATAM’, I think everyone involved should be very proud of what has been achieved so far. These challenges we’ve faced reinforce LATAM’s status as South America’s leading airline and will help us move towards our ultimate goal of becoming one of the world’s leading airlines. ” “In May this year we marked the most significant milestone yet in our journey with the departure of the first LATAM aircraft, one of the most iconic symbols of any airline,” Aylwin continues. “The new aircraft design represents the best of Latin America, and incorporates the elements that symbolise and represent the region under a global brand. The current fleet will be rebranded gradually and repainting of the livery will be scheduled to coincide with routine maintenance to maximise efficiency. Additionally, the new look is also visible in 13 airports where the group’s airlines operate including their hub in Santiago, where Australian passengers fly into. ” Aylwin also highlights the branding benefits of a larger combined airline group for travellers, especially frequent flyers. “Our passengers now have the ability to book tickets via the LATAM website, accumulate kilometres using LATAM’s frequent flyer program, check-in at LATAM counters, relax in LATAM VIP lounges and fly on LATAM-branded aircraft. The new brand has a fresh logo inspired by the identity and heritage of the region, incorporating the best of both airlines. The rebranding rollout will also include a new look across airports, aircraft, webpages and new uniforms designed by renowned Brazilian fashion designer Pedro Lourenco, which will feature the signature indigo and coral of the LATAM logo and were designed to express the diversity and beauty of Latin America. ”

“More than 50 aircraft are anticipated to be rebranded before the end of 2016 and the fleet-wide process – for all 323 aircraft – is expected to be finalised in 2018,” Aylwin says. “Australian passengers can already fly on the newly-branded aircraft to South America, with a fully rebranded commercial flight, including new livery, cabins and uniforms set to be ready for Australian passengers to experience within three years. ”

New twinjets and LAN-TAM A320 fleet offer efficiency and commonality

In the age of efficient twinjets, Qantas’s switch of Boeing 747-operated service to the Chilean capital Santiago from Buenos Aires in early 2012, in partnership with the then-LAN, was the outlier. Air New Zealand’s launch of Buenos Aires services in December 2015 and LAN’s own Dreamliner service on Santiago-Auckland-Sydney services much better highlight the opportunities that the Boeing 787 and Airbus A350 XWB offer.

“The introduction of the Boeing 787 on our Pacific route further signalled LATAM’s commitment to offering one of the most modern, efficient and diverse fleets in the industry and is all a part of LATAM’s plan of expanding our capacity and presence in this region,” Aylwin says.

“With this new aircraft, the long-haul flight over the South Pacific now offers its passengers cutting-edge technology with increased comfort and efficiency, and a chance to experience the next generation of aircraft and the future of flying,” Aylwin notes, also highlighting the benefits of the Dreamliner’s fuel efficiency compared with the previous generation of aircraft.

“In comparison to the A340, which previously serviced this route, the Boeing 787-9 is an exceptionally efficient aircraft in terms of fuel consumption and environmental performance. This new aircraft enhances the inflight travel experience and our overall offering, providing up to 27 per cent more passenger capacity with the same environmental efficiency,” Aylwin says. “The 787 family consumes up to 20 per cent less fuel than other similar aircraft, reducing CO2 emissions by 20 per cent with less environmental impact as well as reducing the noise of the aircraft on takeoff by 40 per cent. ” It’s not just the 787, though, Aylwin says. “LATAM offers one of the most modern and diversified fleets in the sector, which is both efficient and environmentally-friendly. The LATAM Airlines Group fleet has approximately 320 aircraft with an average age of seven years, making it one of the most modern fleets in the industry worldwide. In 2016, we have [continued] and will continue our strategy of replacing the older fleet with newer, more modern aircraft. The company is implementing an important fleet restructuring plan, adding new aircraft that are 20 to 25 per cent more efficient. By the year-end, we expect to have a fleet of 329 aircraft. ” Notes Aylwin, “Typically, LATAM’s 767, 777, 787 and A350’s are used for long haul flights as it offers our passengers more space and comfort required for the longer journey and generally speaking for regional flights, LATAM will employ its A319, 320 and 321. ”

Santiago’s location, Qantas partnership and oneworld membership create extra options

Aylwin explains the benefits of LATAM’s relatively deep partnership with Qantas, to an extent not enjoyed by many other oneworld partner airlines at a similar distance from Australia: “In addition to LATAM Airlines operating seven one-stop flights each week from Sydney to Santiago, LATAM offers Australian travellers even greater travel options and connections to, from and within South America as a member of the oneworld network. This includes connections throughout Australia and non-stop flights between Sydney and Santiago four times per week in codeshare partnership with local oneworld partner airline, Qantas. ” Santiago’s strategic location to the south-west of Latin America is advantageous both in consolidating LATAM’s and Qantas’s advantage on routes between Australia and South America, but also in terms of new connection opportunities as the region continues to develop.

“As South America continues to open up as a destination, connectivity will follow suit. Ultra long-haul routes are a natural progression as Latin America develops and demand increases, especially with the introduction of new fuel-efficient, long-haul aircraft such as the A350 XWB and Boeing 787,” Aylwin says. “We are committed to strengthening our international network and offering passengers greater convenience through new destinations, better itineraries and stronger alliances. ” One new addition: this October, Aylwin says, LATAM will become the only South American airline to operate flights to Africa, with a new TAM-operated service between São Paulo and Johannesburg.

LATAM isn’t concerned about the 2015 arrival of Air New Zealand flights to Buenos Aires, Aylwin says. “Air New Zealand’s entry into this market increases awareness of South America as a destination and we welcome that. LATAM offers daily flights from Sydney to Santiago, with onward connections to over 135 destinations in 25 countries including South American favourites, Brazil, Argentina, Peru, Colombia, Uruguay, Ecuador and Bolivia. ”

Globally unexciting passenger experience on LAN and TAM may need some competitive attention

“LATAM’s unrivalled connectivity throughout the region and state-of-the-art 787-9 aircraft, coupled with its insider knowledge of South America gives LATAM an edge Air New Zealand will never be able to match,” Aylwin says, but LATAM’s regional predominance does not indeed stretch to the passenger experience when compared with Air New Zealand.

In particular, LATAM lacks direct aisle access on its relatively uncompetitive fully flat beds and the premium economy offering that makes ultra long-haul flights bearable – and boosts yields among the lucrative upmarket business and leisure traveller segments – in the age of 17in-wide seats on Boeing 787 Dreamliners for flights timetabled at 16h40m eastbound and 19h10m westbound.

“Passengers flying with LATAM en route to South America will experience the state-of-the-art design and technology of the Boeing 787-9, providing greater comfort, safety, and efficiency,” Aylwin says as we talk passenger experience. “The aerodynamics of the 787-9 incorporates technology that reduces the impact felt by the passenger due to turbulence and the unique pressurisation of the cabin results in the reduction of headaches or other symptoms a passenger might experience when flying, allowing travellers to arrive fresh at their destination. The 787 also reduces the noise footprint on takeoff by up to 40 per cent, in comparison to similar aircraft. ” The 787 is indeed an efficient airframe, and the lower cabin altitude is a significant improvement (particularly compared with the older A340-300 aircraft LAN used to fly to Auckland and on to Sydney). In hard product terms, though, LAN’s 787 and TAM’s A350 are, comparatively speaking, middle-of-the-road in terms of passenger experience (with the exception of the very spacious 3-3-3 A350 economy cabin), their older aircraft are no standouts here either, and short-range operations mimic the frill-free European legacy carrier models rather than the wider variety of options in Australia or the United States.

Aylwin admits that inflight connectivity is not on the cards, that Wi-Fi is limited to streaming entertainment on short-haul, and that even that is not offered on long-haul flights.

“We also offer entertainment on all domestic and regional flights, with personal screens on all long-haul routes. Currently there are no plans to implement Wi-Fi access inflight though we are always looking to help improve our customers’ travel experience and meet modern passenger needs. ” In fairness, for much of their recent past the airlines of the LATAM group have not needed to excel in the area of passenger experience. With the US airlines’ well-documented historical soft product gaps, together with the relative novelty of their long-haul hard product and cabin refit renaissance, this market has not been overly competitive in the area of passenger experience. Distance from Europe, too, has limited the need for hard product competition, while the requirement for a technical stop from Asia (usually in the United States, with all the visa issues that engenders for non- US nationals) has meant that the passenger experience leaders of that region have not set a bar similar to that set in other regions.

It would be unwise, however, for LATAM to expect this competitive landscape to continue in perpetuity.

Eastbound connectivity from Latin America has required a stopover, whether in Europe or, more recently, in the Gulf, though neither are notably efficient for African flights, although the upper end of the South America to Asia market is what Qantas-LATAM and Air New Zealand are hoping to capture with their own flights via Sydney and Auckland.

Well-placed for the outbound Australian market, LATAM focuses on SYD-AKL-SCL trunk routes

In terms of the outbound market from Australia, “South America is a diverse, year-round destination that’s home to rich cultures, stunning landscapes, historical sites and many bucket list trips. Australians are avid travellers and South America caters to just about every type of holiday you can imagine so there’s no surprise this market is increasingly becoming an important segment for us,” Aylwin says. “While there is nothing set in stone I will certainly be working towards increasing our connectivity from Oceania to South America, making the region even more appealing for Aussie and Kiwi travellers. ” Notably, however, flights to Brazil are not currently on the cards. “No new routes are confirmed at this time, however, with LATAM’s extensive network options to, from and within Brazil, Australian travellers can easily access each corner of the region,” Aylwin notes, pivoting neatly to the geographical advantages that LATAM and partner Qantas have in operating their combined trunk route into Santiago before distributing passengers further across Latin America. LATAM also has the opportunity to offer connections over Auckland from Australian cities other than Sydney, although many travellers are understandably wary about relying on the timeliness of the oft-delayed LA800-801 flights.

“LATAM currently offers daily flights from Sydney to Santiago with regular onward connections into Brazil; including popular destinations such as Sao Paulo, Rio do Janeiro and Iguazu,” Aylwin says, highlighting the 115-plus cities that can be reached via a single connection in Santiago eleven times a week from Sydney.

LATAM concentrates on building a solid foundation for a demanding future

“The changes since the merger have helped us to establish LATAM as the leading airline group in Latin America and give us a platform to become one of the leading groups in the world. I would like to see LATAM reach this goal and have our Pacific market play a pivotal role in this success,” Aylwin says frankly.

“This process of transformation thus far has required an evolution of our culture and its goal is to have any person who is making a decision in the company to consider the impact of such decision on our customers. Passengers are increasingly more demanding and our duty is to provide quality service. Hence, we are working towards creating a culture that is solely dedicated to taking care of our passengers. ” Concludes Aylwin, “Another of my key priorities is to ensure that we continue to offer products, services and a network that differentiates us from our competitors. Foremost, my team and I will be working towards increasing our connectivity from Oceania to South America, making the region even more appealing for Aussie travellers,” Aylwin concludes.

With a new name, a fresh new livery, and indeed a new outlook on what it means to be a South American airline, LATAM looks well placed to make the investment in becoming a single airline. It would be naïve to ignore the dark clouds gathering and present on several Latin American national horizons, but the airline’s truly continental reach – and outlook – put it in a decent position to weather the storm.