LanChile is slowing deliveries of new Airbus A320 narrowbody aircraft in the face of stagnant domestic traffic growth. Meanwhile local competitor Avant Airlines has ceased operations, blaming its failure on predatory pricing by recent start-up Aero Continente Chile.

"The last three years have been very tough in Latin America with a mainly flat market. Before that we had around 20% growth and so we had planned for a market that was going to be around 50% bigger than it is now. We need to slow our orders and wait a bit to increase our A320 fleet," says Enrique Cueto, LanChile chief executive.

LanChile has cut back on its planned A320 deliveries next year from eight to just two aircraft. The airline has ordered 25 aircraft, of which only four have been delivered. More immediate deliveries are not affected and the fleet will grow to 10 A320s by the end of this year, replacing smaller Boeing 737-200s.

Lanchile's chief domestic rival Avant has stopped flying after the Chilean anti-monopoly commission failed to uphold its pricing complaint against Aero Continente Chile. Four-year- old Avant, which operated eight 737-200s with around a 25% market share, was also hit by alliance partner Continental Airlines discontinuing services to Santiago.

LanChile will continue to take delivery of seven A340-300s on order, of which two are in service and another two will arrive this year. The type is employed on long-haul routes from Santiago to Miami, New York, Los Angeles and Europe. "On other routes we're going to continue with the [Boeing] 767s," says Cueto.

It had originally planned to replace its 767 passenger fleet with A340s, of which it holds options and floating options on up to another 14 aircraft. The airline recently ordered three more 767-300Fs to add to the three freighters in operation and plans to retain four to six of the passenger version.

LanChile has been operating 767s from Lima to Miami on behalf of Peruvian joint-venture carrier LanPeru and recently extended this to Ecuador, but declines to say whether flag carrier Ecuadorian plans to take an equity stake in the carrier.

"We're talking with the authorities who are looking for someone to help solve Ecuatoriana's economic problems," says Cueto. Talks are expected to last up to a year. Meanwhile, LanChile has turned its attention to Bolivia.

Source: Flight International