ANALYSIS: LAN Colombia forges ahead with international expansion

Washington DC
Source:
This story is sourced from Pro
See more Pro news »

The introduction of widebody aircraft into LAN Colombia's fleet signals the carrier's ambition to carve out a greater market share on international flights from the Colombian capital, more than two years after it was acquired by Chile's LAN and given a new lease of life.

The Bogota-based carrier said last week that it would introduce Boeing 767 aircraft on flights from Bogota to Miami and Sao Paulo from this month. LAN Colombia already operates 767s on its Bogota-Santiago de Chile flights, which launched earlier this year.

Deploying the 767s on the Miami and Sao Paulo flights will increase seat capacity on those routes by 47%, says LAN Colombia, which was operating Airbus A320s on the routes.

The 767s feature lie-flat business class seats and a refreshed cabin interior that LAN first showed off to the world on its new Boeing 787 last year, said a LAN spokesman.

LAN Colombia's chief executive Hernán Pasman believes that the improved product offering on the carrier's three international routes is a first step in helping the airline expand in the international market. Besides the three routes to Miami, Santiago and Sao Paulo, LAN Colombia operates only domestically.

"The added Boeing 767s is a breakthrough in LAN Colombia's international service quality, and a big step forward in the availability of connections between Colombia and some of the major cities in America," Pasman has said.

The introduction of widebody aircraft in LAN Colombia's fleet ushers in a new phase for the carrier, which has gone through some changes since it was acquired by LAN in November 2010 and then rebranded as LAN Colombia in December 2011.

Formerly known as Aires, the airline had previously operated Boeing 737s and Bombardier turboprops. LAN is steadily replacing the carrier's 737s with A320s.

In the last year, LAN Colombia has expanded its international network gradually. While Aires had operated internationally to New York, Panama City and Fort Lauderdale before it was acquired by LAN, it nixed its international flights after the acquisition to concentrate on its domestic network.

It began its first international flights as LAN Colombia, to Miami in February 2012 and followed this with flights to Sao Paulo that June, before launching flights to Santiago earlier this year.

Figures from the Colombian Civil Aviation Authority show that LAN Colombia has almost doubled its seat capacity on international routes in the past year.

The airline offered 18,352 seats on its international flights in January 2013, compared with 9,220 in January 2012, according to the latest available traffic statistics from the authority.

In January 2013, the airline boarded 14,274 passengers, resulting in a load factor of 77.8%, says the authority. This was down slightly from the 80.7% load factor that the carrier reported a year earlier.

LAN Colombia faces competition on all three routes, with Colombia-based AviancaTaca a common competitor on all of them. AviancaTaca has almost half of the market share on international flights out of Bogota, Innovata FlightMaps Analytics shows.

American Airlines and AviancaTaca offer several flights a day on Bogota-Miami, according to Innovata schedules. AviancaTaca is LAN Colombia's sole competitor on Bogota-Sao Paulo, although the former operates twice daily on the route while LAN Colombia flies only once daily.

On Bogota-Santiago, AviancaTaca operates daily while LAN Colombia flies twice weekly. Chile-based LAN also offers five times weekly service on the route.

LAN Colombia's Pasman indicates that the carrier is not done with international expansion. "One of our strategic objectives for 2013 is to strengthen our international business, with better availability and better connections to leverage and boost domestic routes, thus increasing our Colombian market share," he has said.

Going by LAN's fleet plans for its Colombian affiliate, LAN Colombia's international network is set to get bigger. A LAN spokesman told Flightglobal last week that the airline plans to eventually certify 13 767s for total for international flights in Colombia.

At any one time, there will be three 767s operating on LAN Colombia's international flights from Bogota, he said.