Winner - LAN

Award sponsor - Shepherd Business Intelligence

LanChile recognised years ago that because of its limited home market, it could never achieve economies of scale, compete with its larger northern hemisphere rivals, or gain the recognition needed for credible alliances unless it found some way to grow beyond Chile.

But restrictive aviation regimes locked up most of Latin America. Calls by LanChile and Chile's government for open skies fell on sceptical ears.

The airline continued to urge liberalisation, but realised it could not wait for that to happen. This spawned LanChile's strategy of forming cross-border affiliations with other airlines and growing through them. It required finding or forming suitable partnerships in other countries and then overcoming the scepticism of their aviation officials.

Peru was first, followed by Ecuador and the Dominican Republic. Nationals in each country held majority stakes in a carrier either formed by or affiliated with LanChile.

LanPeru, LanEcuador and LanDominicana kept their separate identities, but became part of an integrated network that shared aircraft and crews, co-ordinated flights, advertising and distribution, and took advantage of the travelling public's favourable opinion of LanChile.

With LanChile's north-south routes and its willingness to wet-lease aircraft, it also opened the USA to countries classified as Category 2 under the US international air safety assessment programme. In short, LAN's strategy brought credibility to operating environments that had lacked it.

In March, the group took a simple but clear step with major marketing implications. Each member, including LanChile (except for its domestic arm), dropped the country designation from its name in favour of "LAN" - Latin American Networks - as a single region-wide brand. Using this umbrella name with a common livery for all carriers effectively integrated them into the first pan-Latin American airline.

Rebranding LAN across its network may not bring the synergies of a single legal entity, but it helps. "When I start to juggle assets for greater efficiency, a given aircraft may operate one day for LanChile, another for LanEcuador, and so on. Then the common denominator for a customer looking at this at any airport must necessarily be LAN," says chief executive Enrique Cueto.

LAN has become Latin America's most successful airline group by almost any measure. It is a member of the oneworld alliance alongside American Airlines, the strongest US carrier in Latin America.

"They've done quite a remarkable job from a marketing perspective in an area where a lot of people have fallen on their swords," notes the Awards judging panel, adding that Latin America has been "a graveyard for reputations".


Source: Flight Daily News