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Aviation History
1997
1997 - 3436.PDF
AIR TRANSPORT The Boeing 737-200 forms the backbone of both airlines''short-haulfleets Latin sounds LAN Chile and its subsidiary Ladeco provide the bulk of Chile's air services GEOFFREY JONES/SANTIAGO CHILE'S TWO major airlines, LAN Chile and Ladeco, have been working together formally for some two years, since LAN Chile took control of its struggling domestic contemporary in 1995. The take-over has helped bodi carriers, with Ladeco consoli dating its domestic market position while LAN Chile has been able to concentrate on the devel opment of international routes. LAN Chile's origins can be traced back to Linea Aeropostal Santiago-Arica, founded in 1929. The airline survived the next 60 years, despite the country's less-than-tranquil political history and, in September 1989, was partially privatised. In May 1994, the Chilean Government sold the remainder of LAN Chile to the CuetO family, making it a 100% privately owned company. LADECO CONTROL In August 1995, the Chilean monopolies board approved LAN Chile's application to acquire control of die country's second-largest, mostly domestic airline, Ladeco (Linea Aerea del Cobre) from its then owners die Ibanez Group and Ansett Transport Industries. Iberia had at one stage held a 38% stake in Ladeco, but diis was not considered beneficial as the Spanish air line's main interest seemed to rest with the flag carrier of nearby Argentina, Aerolineas Argentinas, in which the airline also had a share holding. Iberia has since sold its stake in Ladeco. "The 1994 privatisation gave us the spring board to strengthen, and then substantially grow, our core markets and move into solid profitability," says Patrick Kahr, LAN Chile's vice-president for international operations. "We've had the opportunity to invest in the fun damentals of an airline, its aircraft, staff training and service," adds Kahr, who lays great claim to to fact that the airline boasts one of the most modern long-haul fleets in Latin America. Immediately after privatisation, LAN Chile received a $20 million capital injection, and lia bilities and financing on the aircraft in its fleet were renegotiated. Revenue and profitability increased substantially almost immediately after the privatisation. Between 1994 and 1996 revenues rose by 71 % while net income was up a massive 500%. and operating margins were almost doubled from 3.6% to6.7%. There have been further improvements this year, with the first six months showing operating margins improving to 7.3% from 6.1% for the same period in 1996. Kahr says that profitability for 1997 is on tar get for a record figure. "In die first six months of 1996 we saw a S15.5 million profit. The corre sponding figure for 1997 was $24.1 million. The annual profit for 1996 was $38.3 million compared with $25.4 million in 1995, so we expect 1997's figure to top the $50 million mark for the first time," he explains. The Chilean economy has been growing significantly, the gross domestic product aver aging 6.6% compound growth since 1992. LAN Chile has capitalised on the country's geo graphical remoteness and growing tourist industry, serving 15 domestic destinations, 15 others in Latin America and eight destinations in Europe, the South Pacific and the USA. Kahr savs that LAN Chile is very strong in 32 FLIGHT INTERNATIONAL 17 - 23 December 1997
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