LanChile has unveiled plans to set up an Ecuadorian affiliate, LanEcuador, which is set to become the nation's main international carrier.

The move is aimed at tapping the country's large adventure and ecology tourist market. LanChile reportedly plans to invest around $350 million in the subsidiary.

Ecuador's civil aviation authority, the CNAC, has given permission for LanEcuador to fly from Guayaquil and Quito, serving Buenos Aires, Madrid, Miami, New York and Santiago. The carrier is expected to launch services with two LanChile Boeing 767-300ERs and an Airbus A320, possibly by December, and no later than the first quarter of next year, says LanChile.

Ecuador's civil aviation department head Emilio Oneto has said the future of incumbent national carrier Ecuatoriana de Aviación is in limbo, as LanEcuador would fly most of the international routes. The new carrier will generate 500 local jobs.

Ecuatoriana's air operator's certificate was suspended this year when the government decided to hand over the debt-laden airline's operations to LanChile, while it worked out a long-term strategy for the flag carrier.

The LanEcuador initiative is the latest round in the battle between the main Andean carriers, LanChile and Peru's AeroContinente, to achieve control along the west coast of South America.

Last May, the latter submitted a proposal to acquire Ecuatoriana, just before the expiry of an earlier 12-month deal for LanChile to fly Ecuatoriana's services.

LanChile's move into Ecuador could again bring it into direct competition with Latin American airline group TACA, which has been given approval to set up an airline to operate some of the routes of bankrupt Ecuadorian carrier Saeta using leased A319s.

Source: Flight International