LATAM Airlines Group has flexibility in its fleet plan to extend some aircraft leases if the economic situation improves in Brazil.

The Santiago-based carrier could extend leases on “one or two” aircraft that it currently plans to return to lessors this year if demand improves, says Oscar Aguayo, vice-president of aircraft and engines acquisition at LATAM, at the ISTAT Americas conference in Phoenix. It does not plan to extend any leases currently.

Leases on 12 Airbus A320s, one Airbus A330-200 and one Boeing 767-300ER operated by LATAM’s operating subsidiaries LAN Airlines and TAM Airlines are scheduled to expire in 2016, Flightglobal’s Fleets Analyzer database shows. Lessors include AerCap, GECAS, ICBC Leasing, Macquarie AirFinance, SMBC Aviation Capital and Volito Aviation.

LATAM plans to remove 20 aircraft in 2016 under a programme to reduce fleet commitments that was announced in November 2015. It will take delivery of 25 aircraft, including Airbus A321s and Airbus A350-900s, for a net increase of five aircraft during the year.

Aguayo says the three-pronged programme also includes delivery deferrals and selling aircraft to other airlines and to lessors.

LATAM has reduced aircraft capital expenditures by $3 billion through 2018 under the commitment reduction programme.

The programme is in response to the recession in Brazil, where LATAM is the largest airline group.

The carrier plans to reduce domestic Brazil capacity by 6% to 9%, increase domestic capacity in Spanish-speaking countries 6% to 8% and international capacity by 4% to 6% as a result of the programme in 2016. System capacity will be flat to up 3% this year.

Source: Cirium Dashboard