LAN Airlines orders 15 more Airbus A320s

[Andrew Ong 1]

LAN Airlines orders 15 A320s:

 

LAN Airlines confirms 15 additional A320 Family aircraft

21 March 2007

 

LAN Airlines (LAN) has signed a firm contract with Airbus for the acquisition of 15 additional A320 Family aircraft. This is a confirmation of the options that were announced in October 2005.

 

To date, Santiago (Chile) headquartered LAN and its affiliates operate 34 Airbus aircraft including 15 A319s, 15 A320s and four A340s.

 

"We are proud to take part in the tremendous growth of LAN in the Latin American region" said Airbus Chief Operating Officer Customers, John Leahy. "The A320 Family is clearly the winner in its category, and this repeat order from a prestigious airline like LAN really endorses the superiority of our product."

 

With more than 5,000 aircraft ordered and more than 3,000 delivered to approximately 200 customers and operators, the A318, A319, A320 and A321 make up the world's best-selling single-aisle aircraft family. Designed to optimise revenue through cabin adaptability and passenger comfort, and the only ones to feature the most modern and complete fly-by-wire technology that allows full operational commonality, they ensure savings in every element of direct operating cost and provide operators with the highest degree of operational commonality and economy for aircraft in the 100-220 seat category.

 

The A320 Family's optimised cabin cross-section - the widest single-aisle fuselage on the market - sets standards for passenger cabin flexibility in this segment. It allows for top-of-the-range comfort with wider seats and aisles, or an extra-wide aisle for the fast turnarounds that are essential in the low-cost markets. Superior cabin size and shape allow larger overhead stowage to be fitted for faster boarding and deplaning as well as greater convenience.

 

The A320 Family's impressive level of dispatch reliability further enhances profitability and passenger service. In addition, the A320 Family is an environmentally responsible neighbour, offering the lowest fuel burn, emissions and noise footprints in its class.

 

Airbus is an EADS company.

[Pieter C. 5]

Will TAM join OneWorld with teaming up with LAN ?

 

TAM and LAN yesterday announced agreement on a formalized business alliance for services in South America, to be implemented "within the next months," that apparently will include codesharing, linking loyalty programs and lounge sharing. "TAM will expand its flight [offerings] in South America to include a more complete and diversified network for its passengers. In addition, clients of LAN Alliance companies will enjoy the ease of traveling routes operated by TAM and TAM Mercosur, with multiple hours and frequency options," the companies said. Passengers will be able to travel "with a single ticket from the beginning to the end of the route."

 

The alliance apparently will not cover flights to the US and Europe. TAM has a 50.7% market share in the Brazilian domestic market, where its network comprises 48 destinations. It also operates to Buenos Aires and Santiago and plans to launch daily flights to Caracas in the next six months. TAM Mercosur serves Asuncion and Ciudad del Este in Paraguay, Cordoba in Argentina, Montevideo in Uruguay, and Santa Cruz de la Sierra and Cochabamba in Bolivia. The LAN Alliance serves 15 destinations in Chile, 12 in Peru, 10 in Argentina, two in Ecuador and 15 in other Latin American countries and the Caribbean.

 

TAM's net income drops owing to rapid expansion; more growth projected

 

Friday May 11, 2007

TAM reported first-quarter net income of BRL59.2 million ($29.2 million), down 53.3% from BRL126.7 million in the year-ago quarter, a drop mainly attributable to a 37.4% year-over-year increase in aircraft costs and a 40.9% rise in personnel expenses as the fast-growing Brazilian carrier continued to expand into the vacuum created by the near demise of Varig.

 

Revenue increased 15% to BRL1.83 billion as costs jumped 24.8% to BRL1.68 billion, producing operating income of BRL146.1 million, down 38.6% from BRL237.7 million in the year-ago quarter. Traffic grew 33.2% to 7.77 billion RPKs on a 36.5% lift in capacity to 10.97 billion ASKs as it added 18 A320s and two A319s to its fleet. Load factor dropped 1.7 points to 70.8%.

 

Yesterday, Chairman and CEO Marco Antonio Bologna touted this week's announcement of a "full codeshare agreement within the full South American region" with LAN Airlines and pointed to existing codeshare accords with American Airlines, Air France and TAP Portugal as evidence of TAM's expanding global reach. He said the carrier will continue to pursue bilateral codeshare agreements and does not currently have plans to join an alliance.

 

CFO Libano Miranda Barroso noted that Brazil's ATC problems added $7.5-$8 million in fuel burn costs during the quarter because inefficient traffic management means that "sometimes aircraft have to circulate more or wait longer on the ground with engines running." He added, "We believe the government will solve this. All the government institutions are aligned to reach a solution."

 

For the full year 2007, Bologna projected a 30% increase in domestic capacity and a 60%-70% lift in international ASKs. TAM will operate 112 aircraft by year end.