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Aviation History
1999
1999 - 2004.PDF
PARK AVENUE HMMWCSHTBt imm W ^5 "^% 11<f 'f **? «f * •* »" # •<* « ««i *&^ *| '•i *t H *f *| 1 "f ^ *t:flf ^ ^ *•* *, •", 1"";'" I I I I I I I ItiTn1 iIiTD llHllf ttflt iniiiininiiT 11 illr liif IfflllftiiTHm iiiiiiiiiiiiiiiin |U rrrrrrrrrrrrrrrrrrrr frrrrrrrrrrrrrrrrrrr! rrrrrrrrrawrrrri rnrrn 1i 1i LanChile uses 767-300ERs on long-haul flights, hit from August next year will have A340s American's AAdvantage, says Cueto, has proved a moneyspinner for LanChile with American Airlines passengers. Distance protects Chile from the full blast of US airline competition, Cueto says. While for a US airline it takes only a single widebody air craft to serve the major cities in Central America or the north of South America daily, Santiago is 12h from most of the USA. That means a daily service requires two widebodies - twice the hardware investment for any single route from the USA to Santiago. Conversely, this makes LanChile's partner ship more attractive to American. By July the alliance should have stimulated enough demand for LanChile to operate three 767-3 00s weekly from Buenos Aires to Santiago, then non-stop to Los Angeles, as well as the existing daily Santiago-Lima-LA schedule. THE FLEXIBILITY FACTOR Cueto's airline has been profitable every year since its restructure in 1994, when the carrier's extensive Miami, USA-hubbed cargo operation was integrated with the main line business at Chile's capital, Santiago. He attributes this suc cess largely to a policy of being flexible in react ing to markets, and to LanChile earning one-third of its income in cargo, meaning that the airline is more diversified than the average. Of the total freight that LanChile carries each year, two-thirds is moved via its long-estab lished Miami cargo hub. Cueto points out that, throughMiami, LanChile links the USA to "all the major cities of South America", not just to Chile. As well as LanChile's two cargo 767s and four McDonnell Douglas DC-8-71Fs, the air line also uses Adas Air Boeing cargo 747-2 00s and-400s. The flexibility, he says, comes from being pri vate while many competitors are state-con trolled. "We have a good mix of management and shareholders who are very near the opera tion," he says, adding for clarification that a third of LanChile's equity is owned by his fami ly. The result, he says, is that management is free to react quickly to market changes. Chile's gov ernment does not interfere with the airline's management. "This is a country which believes in the open market and competition," Cueto insists. "We are fighting for an open skies agreement with the USA, Argentina and Peru." The USA wants open skies, says Cueto, but Chile will only agree if LanChile's request for alliance with American Airlines is granted with out reservation. The greatest resistance to open skies, he says, comes from Europe. The need for flexibility also governs LanChile's fleet acquisition policy, resultingin a judicious mix of ownership and operating leas es. Costs are kept down by operating only three types, across passenger and cargo • iiimiiizflwuiifl L ANCHILE TRAINS its engineers at Santiago in a school run by Lufthansa Technik. This is likely to be expanded to become a maintenance training centre for the region. In the past, says Cueto, maintenance engineers came from Chile's air force. Pilot needs so far have been met by for mer military aircrew, or they are hired from smaller airlines. Type conversion and recurrent training was provided by LanChile. Now the infrastructure for a Boeing 737-200 simulator is being built, with the simulator to be installed early next year. Negotiations with Lufthansa Technik are in progress to create a pilot training centre, primarily to train LanChile pilots but potentially open to others if the German company sees a market for training pilots for other airlines, Cueto says. Meanwhile, LanChile is working with one of the Valparaiso universities to recruit pilots who have been trained in an academic discipline. The intention is to make a career as an airline pilot into a formal profession, contributing to LanChile's continual drive for high levels of safety. FLIGHT INTERNATIONAL 7 - 13 July 1999 27
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