Peru's new president expresses desire for flag carrier

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In his first public address as Peru's newly elected president, Ollanta Humala said that "Peru needs a flag carrier", while assuring that he favours competition to improve market conditions.

"We will take the necessary measures to ensure that Peru will have its [national] flag carrier", he said, adding that one goal will be the "improvement of air connectivity within the country's interior".

Humala confirmed before his election that he would respect all existing contracts, denying reports that he would seek some kind of nationalisation of LAN Peru, the LAN affiliate that controls more than half of Peru's domestic traffic.

No further details are known about his plans for the new airline or the airport concessions.

Humala's comments might suggest that the planned airline could receive a mandate to serve remote destinations in the interior to which commercial flights are not viable, but also to compete on trunk routes to improve competition.

Peru has had no formal flag carrier since the demise of Aeroperu in 1999, although the country maintained TANS, an air force owned commercial carrier to serve social service routes until a number of accidents triggered its shutdown in 2006.

The country is one of the fastest growing emerging economies in the world with sustained growth rates of around 9% leading to spectacular domestic traffic growth rates which reached nearly 27% last year, while growth this year is expected to moderate to 15-16%.