TAM e LAN si fondono
- Autore Discussione micky87
- Data d'inizio
Ultime novita'
http://www.ttgitalia.com/pagine/Tam...taglio001,IT,277441,Notizie_del_396-news.aspx
Tam Airlines: a marzo 2012 la fusione con Lan Chile
14/12/2011
È prevista per marzo 2012 la fusione tra Tam Airlines, compagnia aerea brasiliana, e Lan Chile: dopo ci saranno 24 mesi di tempo per decidere se rimanere in Star Alliance, di cui Tam Airlines è membro, oppure in oneworld di cui fa parte Lan Chile. "Decideremo con calma in base al nuovo network, ai benefit per i clienti e all'economia del gruppo - ha detto Libano Miranda Barroso, ceo di Tam Airlines -: in ogni caso non ci sarà alcuna riduzione del personale, ci uniamo per crescere e prevediamo un incremento dei collegamenti verso Madrid, Miami, Buenos Aires e Santiago del Cile". Parole di soddisfazione arrivano anche per il mercato italiano: "Siamo molto contenti di come stanno andando le cose, Mxp è una destinazione molto importante per la compagnia", ha commentato il ceo.
http://www.ttgitalia.com/pagine/Tam...taglio001,IT,277441,Notizie_del_396-news.aspx
Tam Airlines: a marzo 2012 la fusione con Lan Chile
14/12/2011
È prevista per marzo 2012 la fusione tra Tam Airlines, compagnia aerea brasiliana, e Lan Chile: dopo ci saranno 24 mesi di tempo per decidere se rimanere in Star Alliance, di cui Tam Airlines è membro, oppure in oneworld di cui fa parte Lan Chile. "Decideremo con calma in base al nuovo network, ai benefit per i clienti e all'economia del gruppo - ha detto Libano Miranda Barroso, ceo di Tam Airlines -: in ogni caso non ci sarà alcuna riduzione del personale, ci uniamo per crescere e prevediamo un incremento dei collegamenti verso Madrid, Miami, Buenos Aires e Santiago del Cile". Parole di soddisfazione arrivano anche per il mercato italiano: "Siamo molto contenti di come stanno andando le cose, Mxp è una destinazione molto importante per la compagnia", ha commentato il ceo.
LATAM,GOL,TACA-Avianca,AerolineasArgentinas,Copa
è come se in europa si fondessero AF-LH-BA (e consociate) e rimanessero: Tap,Finnair,SAS,Aegean?
...addio competizione in SudAmerica. ok lo so, ci sono moltre altre compagnie ancora minori, peró credo siamo di questa più o meno.
è come se in europa si fondessero AF-LH-BA (e consociate) e rimanessero: Tap,Finnair,SAS,Aegean?
...addio competizione in SudAmerica. ok lo so, ci sono moltre altre compagnie ancora minori, peró credo siamo di questa più o meno.
probabilmente ci sara' un antirust meno severa/attenta in sud america..
comunque credo/spero qualche vincola/restrizione ci sia
Quale sara' il market share (in posti offerti) che avra' LATAM Airlines nel sudamerica post merger?
premessa: la mia era una supposizione e posso basarmi solo sulle conoscenze generiche quindi se avessi torto ne sarei solo che felice.
Lan è forte su tutta al costa pacifica e non solo: LanChile,LanPerú,LanEcuador,LanArgentina. a questo aggiungi la principale compagnia aerea brasiliana (molto più forte della seconda).
Lineas Aereas Argentinas non è in una posizione forte e come HUB è peggio posizionata di TAM.
TACA stra crescendo ma ancora non è cosí rilevante
Avianca credo abbia un potenziale ma finché AviancaBrasil non prende una buona posizione rimane comunque secondaria.
GOL la conosco poco ma non credo si spinga molto al di fuori del Brasile.
Copa credo sia a livello di TACA.
questo per il settore inter-sudamericano
se consideri le connessioni con l'Europa: LATAM + Iberia faranno la parte del gigante e senza numeri esatti io mi sbilancio a dire che faranno un 50% almeno dei voli dato che le rimanenti sono: TAP,LH,BA,AF-KL,AZ,argentinas,avianca
Ritengo la tua supposizione giustificata, mi chiedevo solo se ci fossero dati al riguardo.
Latin America's biggest airline LATAM is approved
14 December 2011 Last updated at 23:24
The merger of two major Latin American airlines has been approved, creating the largest carrier in the region.
Brazil's anti-trust authorities said they approved the merger of the Brazilian airline TAM with Chile's LAN, first proposed in 2010.
The new airline, LATAM, is valued at about $14.5bn (£9.4bn) and will represent 6% of global air transport.
Last year, TAM and LAN flew more than 45 million passengers and 754,777 tonnes of cargo.
The combined airline would fly to 115 destinations in 23 countries, with a 40,000-strong workforce.
Chile's anti-trust authorities had already approved the merger but had set 11 conditions, including fewer flights to the Peruvian capital, Lima.
Brazil's body also set some conditions, including a reduction in the number of flights between Sao Paulo and Santiago and that the two airlines join a single international body.
TAM is a member of the Star Alliance group of airlines, which includes BMI, Lufthansa, SAS and Air China.
Meanwhile LAN is a member of the Oneworld airline alliance, which includes Iberia, British Airways, Qantas and JAL.
The airlines have not yet said which one they will join.
http://www.bbc.co.uk/news/business-16191762
14 December 2011 Last updated at 23:24
The merger of two major Latin American airlines has been approved, creating the largest carrier in the region.
Brazil's anti-trust authorities said they approved the merger of the Brazilian airline TAM with Chile's LAN, first proposed in 2010.
The new airline, LATAM, is valued at about $14.5bn (£9.4bn) and will represent 6% of global air transport.
Last year, TAM and LAN flew more than 45 million passengers and 754,777 tonnes of cargo.
The combined airline would fly to 115 destinations in 23 countries, with a 40,000-strong workforce.
Chile's anti-trust authorities had already approved the merger but had set 11 conditions, including fewer flights to the Peruvian capital, Lima.
Brazil's body also set some conditions, including a reduction in the number of flights between Sao Paulo and Santiago and that the two airlines join a single international body.
TAM is a member of the Star Alliance group of airlines, which includes BMI, Lufthansa, SAS and Air China.
Meanwhile LAN is a member of the Oneworld airline alliance, which includes Iberia, British Airways, Qantas and JAL.
The airlines have not yet said which one they will join.
http://www.bbc.co.uk/news/business-16191762
AIRES sta per diventare Lan Colombia.
Gli unici stati scoperti sono Venezuela, Bolivia ed Uruguay ( Ricordiamo che TAM è presente fortemente nel Paraguay)
Copa comunque è una costola di Continental/United.
Gli unici stati scoperti sono Venezuela, Bolivia ed Uruguay ( Ricordiamo che TAM è presente fortemente nel Paraguay)
Copa comunque è una costola di Continental/United.
se "nasce" anche Lan Colombia veramente muore la concorrenza in Sud America
dai, c'è Lan Argentina ma si può sperare che Aerolineas Argentians inizino a fare qualcosa di nmuovo e serio.
forse mi sbaglio però: erro o Copa non è più da qualche anno costola di CO? (quindi ora di UA-CO)
Il merger produrra' piu' singergie di quelle prefissate in origine
LAN/TAM increase merger synergy estimates
By Aaron Karp | January 16, 2012
Chile's LAN Airlines and Brazil's TAM said their planned merger under LATAM Airlines Group, expected to be completed by the end of March (ATW Daily News, Dec. 23), will produce even more synergies than previously expected. The carriers last week revised upward from $400 million per year to $600-$700 million annually the value of the synergies expected to result from a merger that will create a mega-airline group controlling more than 40% of Latin America's air passenger market.The $600-$700 million annual figure won't be realized until four years after the completion of the merger transaction, but the airlines believe $170-$200 million will be achieved within a year of the combination's finalization.
The higher synergy estimate "reflects further revisions and updates of the expected combined cost savings and revenue generating opportunities arising from the proposed combination and includes best practice sharing benefits that have been identified in certain areas," the carriers said in a statement.
Breaking down the numbers further, LAN/TAM said approximately 40% of the potential synergies will come from increased passenger revenue ($225-$260 million), 20% from higher cargo revenue ($120-$125 million) and 40% from cost savings. According to LAN/TAM, expense savings will come from consolidating frequent flyer programs ($15-$25 million), coordinating airport and procurement activities ($100-$135 million), improved maintenance efficiency ($20-25 million) and information technology system convergence ($120-$130 million).
The synergy estimates do not count one-time merger costs of $170-$200 million expected to be incurred by LAN/TAM. But those costs will be somewhat offset longer-term by reduced investments of around $150 million for engine and spare part purchases that will be avoided because of the merger.
http://atwonline.com/airline-finance-data/news/lantam-increase-merger-synergy-estimates-0113
LAN/TAM increase merger synergy estimates
By Aaron Karp | January 16, 2012
Chile's LAN Airlines and Brazil's TAM said their planned merger under LATAM Airlines Group, expected to be completed by the end of March (ATW Daily News, Dec. 23), will produce even more synergies than previously expected. The carriers last week revised upward from $400 million per year to $600-$700 million annually the value of the synergies expected to result from a merger that will create a mega-airline group controlling more than 40% of Latin America's air passenger market.The $600-$700 million annual figure won't be realized until four years after the completion of the merger transaction, but the airlines believe $170-$200 million will be achieved within a year of the combination's finalization.
The higher synergy estimate "reflects further revisions and updates of the expected combined cost savings and revenue generating opportunities arising from the proposed combination and includes best practice sharing benefits that have been identified in certain areas," the carriers said in a statement.
Breaking down the numbers further, LAN/TAM said approximately 40% of the potential synergies will come from increased passenger revenue ($225-$260 million), 20% from higher cargo revenue ($120-$125 million) and 40% from cost savings. According to LAN/TAM, expense savings will come from consolidating frequent flyer programs ($15-$25 million), coordinating airport and procurement activities ($100-$135 million), improved maintenance efficiency ($20-25 million) and information technology system convergence ($120-$130 million).
The synergy estimates do not count one-time merger costs of $170-$200 million expected to be incurred by LAN/TAM. But those costs will be somewhat offset longer-term by reduced investments of around $150 million for engine and spare part purchases that will be avoided because of the merger.
http://atwonline.com/airline-finance-data/news/lantam-increase-merger-synergy-estimates-0113
Torna di nuovo Marco Antonio Bologna - sara' di nuovo CEO di TAM
Líbano Barroso leaves the role of TAM Linhas Aéreas’ CEO to dedicate himself to the holding company; Marco Antonio Bologna will be CEO of the holding
At a meeting held today, the Board of Directors of TAM S.A. approved changes in the structure of the company that were previously due to take effect upon conclusion of the merger with LAN Airlines, as announced to the market on October 28, 2011. Marco Antonio Bologna, CEO of the holding company TAM S.A., will also assume the role of CEO of TAM Airlines.
Líbano Barroso, who was in charge of the airline business of the group since October 2009, will remain CFO and Investor Relations Director of the holding company TAM S.A. until the creation of the LATAM Airlines Group (the holding company that will emerge from the merger of the two airlines), where he will be CFO.
"Líbano will be dedicated to the development of the holding company TAM S.A., which includes the structuring of our company for the future integration with LAN, as soon as all necessary legal requirements for the merger are completed," says Bologna, who started working at TAM in 2001, going through several positions in the group, including CEO of TAM Airlines.
"I had the honor of leading the company for over two years, during a period of great challenges and achievements," says Líbano Barroso. "I am happy and excited to be able to continue contributing, and in the future, to help to create one of the largest airline groups in the world."
fonte: TAM
Líbano Barroso leaves the role of TAM Linhas Aéreas’ CEO to dedicate himself to the holding company; Marco Antonio Bologna will be CEO of the holding
At a meeting held today, the Board of Directors of TAM S.A. approved changes in the structure of the company that were previously due to take effect upon conclusion of the merger with LAN Airlines, as announced to the market on October 28, 2011. Marco Antonio Bologna, CEO of the holding company TAM S.A., will also assume the role of CEO of TAM Airlines.
Líbano Barroso, who was in charge of the airline business of the group since October 2009, will remain CFO and Investor Relations Director of the holding company TAM S.A. until the creation of the LATAM Airlines Group (the holding company that will emerge from the merger of the two airlines), where he will be CFO.
"Líbano will be dedicated to the development of the holding company TAM S.A., which includes the structuring of our company for the future integration with LAN, as soon as all necessary legal requirements for the merger are completed," says Bologna, who started working at TAM in 2001, going through several positions in the group, including CEO of TAM Airlines.
"I had the honor of leading the company for over two years, during a period of great challenges and achievements," says Líbano Barroso. "I am happy and excited to be able to continue contributing, and in the future, to help to create one of the largest airline groups in the world."
fonte: TAM
Chile's LAN, Brazil's TAM Set May 12 Date To Complete Merger -Report
Read more: http://www.foxbusiness.com/news/201...date-to-complete-merger-report/#ixzz1pZVsgZat
SANTIAGO – The controlling shareholders of Chile's LAN Airlines SA (LFL, LAN.SN) and Brazil's TAM S/A (TAM.SN) set May 12 as the day to complete the merger of the carriers, Diario Financiero reported Monday citing undisclosed sources.
The company resulting from the tie-up, to be called LATAM Airlines, will be the biggest in Latin America and one of the ten largest carriers in the world in terms of revenue.
A representative for LAN said he couldn't immediately confirm the reported date.
The companies have already filed a proposed share exchange program with the U.S. Securities and Exchange Commission and have cleared nearly all the regulatory hurdles prior to the merger.
Chile's Supreme Court still is expected to rule later this month on a few contested mitigation measures the Anti-Trust Court ordered.
In addition, the merged carrier has to opt for a global alliance as TAM belongs to Star Alliance and LAN to One World, as ordered by Chile's Anti-Trust Court.
Read more: http://www.foxbusiness.com/news/201...date-to-complete-merger-report/#ixzz1pZVuhER3
Read more: http://www.foxbusiness.com/news/201...date-to-complete-merger-report/#ixzz1pZVsgZat
SANTIAGO – The controlling shareholders of Chile's LAN Airlines SA (LFL, LAN.SN) and Brazil's TAM S/A (TAM.SN) set May 12 as the day to complete the merger of the carriers, Diario Financiero reported Monday citing undisclosed sources.
The company resulting from the tie-up, to be called LATAM Airlines, will be the biggest in Latin America and one of the ten largest carriers in the world in terms of revenue.
A representative for LAN said he couldn't immediately confirm the reported date.
The companies have already filed a proposed share exchange program with the U.S. Securities and Exchange Commission and have cleared nearly all the regulatory hurdles prior to the merger.
Chile's Supreme Court still is expected to rule later this month on a few contested mitigation measures the Anti-Trust Court ordered.
In addition, the merged carrier has to opt for a global alliance as TAM belongs to Star Alliance and LAN to One World, as ordered by Chile's Anti-Trust Court.
Read more: http://www.foxbusiness.com/news/201...date-to-complete-merger-report/#ixzz1pZVuhER3
[h=1]LATAM’s 4Q2012 yields are damaged by aggressive competitive expansion in the US-Brazil market[/h]CAPA > Aviation Analysis > LATAM’s 4Q2012 yields are damaged by aggressive competitive expansion in the US-Brazil market
29th March, 2013
[TABLE="class: social"]
[TR]
[TD]
[TD]
[/TD]
[TD]Tweet[/TD]
[TD]
[/TD]
[/TR]
[/TABLE]
© CAPA
Competitive pressure in long-haul markets between the US and Brazil was a major driver in the 10.3% year-over-year decrease in yields during 4Q2012 for the powerful newly minted LATAM Airlines Group, which is the combination of Brazil’s leading carrier TAM and South American group LAN. The performance in long-haul markets is likely disappointing for the group as its performance in Brazil’s cooling domestic market improved during the last three months of 2012.
In some ways the competitive pressure on long-haul markets from the US and Brazil will be short-lived as TAM and American Airlines are working to forge a codeshare partnership that will see the two historic rivals team up in the market now that LATAM has selected oneworld as its alliance of choice. Once all the regulatory approvals for the tie-up are in place, TAM will be able to benefit from onward connections in Miami and New York that it currently does not enjoy. Based on current schedules in Innovata (24-Mar-2013 to 30-Mar-2013) TAM and American presently account for 69% of the capacity between the US and Brazil.
Brazil to United States (seats per week, one way): 19-Sep-2011 to 15-Sep-2013
Source: CAPA - Centre for Aviation and Innovata
The decline in LATAM’s yields and corresponding 7% fall in passenger unit revenues were mainly attributable competitive pressure in its international market. Both LATAM and its international competitors introduced ample capacity on international routes as ASKs in LATAM’s international network increased 13% year-over-year during 4Q2012.
LATAM Airlines Group change in select operating statistics: 4Q2011 vs 4Q2012
Source: LATAM Airlines Group
LATAM executives recently explained to analysts that both their company and other carriers introduced excess capacity in international service, particularly in the US-Brazil market, noting American and United added 16 weekly frequencies between the US and Brazil and LATAM’s capacity between the two countries increased about 22% year-over-year during 4Q2012. The result was carriers “becoming aggressive in their commercial conditions”, LATAM executives explained, which created pricing pressure in the markets.
American’s during 2012 introduced direct flights from Miami to Manaus while also increasing frequencies between Miami and Belo Horizonte andBrasilia. The carrier also expanded weekly frequencies from Dallas to Sao Paulo.
TAM responded by increasing frequencies from Miami to Belo Horizonte and Brasilia. The carrier also upgauged its Sao Paulo-Miami flights from 223-seat Airbus a330s to 362-seat Boeing 777-300ERs, a seat expansion of roughly 63%. TAM also introduced service between Rio de Janeiroand Orlando in Oct-2012, but later opted to cut the flight in early Apr-2013. It service from Sao Paulo to Orlando remains intact.
See related article: American Airlines and TAM continue to expand US-Brazil as other markets show signs of weakness
LATAM executives assured that the company’s fortunes should improve on international service between the US and Brazil during 3Q2012, noting that is the timeframe of when the carrier expects to turn a positive result from the added capacity from Sao Paulo to Miami and New York.
Company management also stressed that the planned codeshare with American Airlines, which is subject to approval from Brazilian authorities, was a significant element of its international network strategy going forward as the tie-up would allow TAM to improve connections at American’s hubs in Miami and New York JFK. Presently, TAM is limited in its offerings beyond those markets as its Star partner United has no presence in the robust Brazil-Miami market and serves the New York metro area from its Newark hub.
[h=2]Lima remains as key connection point in the combined LATAM network[/h]LATAM has no plans to deter from building up its hub in Lima to build the market as a stopover to connect passengers from North and South America. The company will leverage the combined networks to funnel traffic through Lima. Now that the merger is complete LATAM can flow traffic from Brazil through Lima as well as passengers from other important Southern Cone markets of Argentina and Chile. Presently LATAM is focusing on changing flight times to improve connections in Lima, said company officials.
While LATAM is keen to leverage its strength as Lima’s largest carrier, where it accounts for about 53% of the seating capacity, the market’s second largest airline Avianca-TACA began basing a widebody Airbus A330 jet in Lima during late 2012 to boost capacity between Lima and Buenos Airs and its hub in Bogota. A second widebody will be placed in Lima in 2013 to to expand capacity between Lima and Miami.
Lima J Chavez International Airport capacity by carrier (% of seats): 25-Mar-2013 to 31-Mar-2013
Source: CAPA - Centre for Aviation and Innovata
Lima is rising to a position of prominence in the networks of both LATAM and Avianca-TACA as means to partially compete with Panama, whereCopa enjoys a strategic advantage of connecting passengers between North and South America. Since both of Latin America’s largest airline groups now plan to bolster their connection capabilities in Lima, competitive pressure for both companies is likely to intensify in the short term as Avianca-TACA works to strengthen its presence in the market and LATAM ensures its retains its commanding share.
See related article: TACA continues expansion in Peru with A330s ahead of rebranding as Avianca
[h=2]A promising rebound in the Brazilian domestic market[/h]Pressure in LATAM’s international markets during 4Q2012 was somewhat counter-balanced by improvement in the company’s performance in the Brazilian domestic market, which was weak throughout the majority of 2012. Although TAM’s 4.2% reduction during 4Q2012 in ASKs was 11.3ppt below the 15.5% cut ushered in by its main Brazilian domestic competitor Gol (partially due to the shuttering of Gol’s subsidiary Webjet in Nov-2012), TAM’s traffic grew by nearly 12% while Gol recorded a 9% decline in its traffic. LATAM said it is working to improve revenue management within the different passenger segments in the Brazilian domestic market, with an emphasis on stimulating demand among price sensitive travellers.
LATAM predicts it will continue to improve its performance in the Brazilian domestic market during 2013, and estimates a double-digit unit revenue increase year-over-year.
LATAM Airlines Group operating performance year-over-year in the Brazil domestic market: Oct-2011 to Feb-2013
Source: LATAM Airlines Group
LATAM plans to reduce ASKs in the Brazilian domestic market by 5%-7% during 2013 as company executives stressed that capacity discipline is key to regaining profitability in Brazil. Gol’s planned capacity reduction is slightly more pronounced than its rival as it expects to cut domestic ASK growth between 8% and 10% in 2013.
Both of Brazil’s largest carriers have declared that their fortunes in the domestic space will improve during 2013. Gol has joined its rival in predicting that its unit revenues will rise by double digits during 2013 and is encouraged that even smaller regional carriers including Azul-TRIP andAvianca Brazil are slowing down their capacity growth.
Gol is encouraged that the domestic market will strengthen during 2013 as evidence by its 10% unit revenue growth in Jan-2013 and a 14% year-over-year increase during Feb-2013. The trends appear positive as the majority of Gol’s operations are centred in the Brazilian domestic market.
See related article: Gol pledges a financial turnaround as it records a second annual loss, USD745 million
[h=2]LATAM’s 4Q2012 profits are hurt by integration charges[/h]LATAM during 4Q2012 recorded a profit of USD8.% million after recording USD21.9 million from transaction expenses and USD52.7 million in aircraft sales and redelivery costs. Factoring out those special items LATAM posted a USD115 million net profit even as revenues remained roughly flat at USD3.4 billion.
LATAM Airlines Group financial results: 4Q2011 vs 4Q2012
Source: LATAM Airlines Group
Company executives estimate that LATAM should achieve USD250 million to USD300 million in merger synergies during 2013, and the group remains on track to achieve its full USD600 million to USD700 million synergy target in 2016. However, the group will incur certain integration expenses as it makes progress on its synergy goals.
There is also an evaluation under way of the combined carrier’s fleet plan in response to the competitive and macroeconomic environment. Presently, the company’s projections indicate a combined fleet of 323 aircraft by year-end 2013, a decrease of four shells from year-end 2012.
LATAM Airlines Group fleet projections: 2012 to 2015
Source: LATAM Airlines Group
LAN and TAM officially merged in Jun-2012, which means that the two companies are not terribly far along in the process of maximising their respective fleets and networks to really produce any meaningful results from the new LATAM Airlines Group. While there seems to be some miscalculation in the reaping the benefits of spooling-up the US-Brazil market, there are important pieces in place for LATAM to meet its synergy targets.
With Brazil’s domestic market improving, TAM’s jump from Star to oneworld and the company’s leading position in Lima, benefits from the merger should surface in 2013. The usual risks of high fuel prices, currency fluctuation and aggressive competition could continue to pressure the group during 2013, but its heft and scope as the preeminent airline group in Latin America puts LATAM in a strong position to weather potential obstacles that could pressure its results.
29th March, 2013
[TABLE="class: social"]
[TR]
[TD]
in[COLOR=#333333 !important]Share[/COLOR]
[/TD][TD]
[/TD]
[TD]Tweet[/TD]
[TD]
[/TD]
[/TR]
[/TABLE]
© CAPA
Competitive pressure in long-haul markets between the US and Brazil was a major driver in the 10.3% year-over-year decrease in yields during 4Q2012 for the powerful newly minted LATAM Airlines Group, which is the combination of Brazil’s leading carrier TAM and South American group LAN. The performance in long-haul markets is likely disappointing for the group as its performance in Brazil’s cooling domestic market improved during the last three months of 2012.
In some ways the competitive pressure on long-haul markets from the US and Brazil will be short-lived as TAM and American Airlines are working to forge a codeshare partnership that will see the two historic rivals team up in the market now that LATAM has selected oneworld as its alliance of choice. Once all the regulatory approvals for the tie-up are in place, TAM will be able to benefit from onward connections in Miami and New York that it currently does not enjoy. Based on current schedules in Innovata (24-Mar-2013 to 30-Mar-2013) TAM and American presently account for 69% of the capacity between the US and Brazil.
Brazil to United States (seats per week, one way): 19-Sep-2011 to 15-Sep-2013
Source: CAPA - Centre for Aviation and Innovata
The decline in LATAM’s yields and corresponding 7% fall in passenger unit revenues were mainly attributable competitive pressure in its international market. Both LATAM and its international competitors introduced ample capacity on international routes as ASKs in LATAM’s international network increased 13% year-over-year during 4Q2012.
LATAM Airlines Group change in select operating statistics: 4Q2011 vs 4Q2012
Source: LATAM Airlines Group
LATAM executives recently explained to analysts that both their company and other carriers introduced excess capacity in international service, particularly in the US-Brazil market, noting American and United added 16 weekly frequencies between the US and Brazil and LATAM’s capacity between the two countries increased about 22% year-over-year during 4Q2012. The result was carriers “becoming aggressive in their commercial conditions”, LATAM executives explained, which created pricing pressure in the markets.
American’s during 2012 introduced direct flights from Miami to Manaus while also increasing frequencies between Miami and Belo Horizonte andBrasilia. The carrier also expanded weekly frequencies from Dallas to Sao Paulo.
TAM responded by increasing frequencies from Miami to Belo Horizonte and Brasilia. The carrier also upgauged its Sao Paulo-Miami flights from 223-seat Airbus a330s to 362-seat Boeing 777-300ERs, a seat expansion of roughly 63%. TAM also introduced service between Rio de Janeiroand Orlando in Oct-2012, but later opted to cut the flight in early Apr-2013. It service from Sao Paulo to Orlando remains intact.
See related article: American Airlines and TAM continue to expand US-Brazil as other markets show signs of weakness
LATAM executives assured that the company’s fortunes should improve on international service between the US and Brazil during 3Q2012, noting that is the timeframe of when the carrier expects to turn a positive result from the added capacity from Sao Paulo to Miami and New York.
Company management also stressed that the planned codeshare with American Airlines, which is subject to approval from Brazilian authorities, was a significant element of its international network strategy going forward as the tie-up would allow TAM to improve connections at American’s hubs in Miami and New York JFK. Presently, TAM is limited in its offerings beyond those markets as its Star partner United has no presence in the robust Brazil-Miami market and serves the New York metro area from its Newark hub.
[h=2]Lima remains as key connection point in the combined LATAM network[/h]LATAM has no plans to deter from building up its hub in Lima to build the market as a stopover to connect passengers from North and South America. The company will leverage the combined networks to funnel traffic through Lima. Now that the merger is complete LATAM can flow traffic from Brazil through Lima as well as passengers from other important Southern Cone markets of Argentina and Chile. Presently LATAM is focusing on changing flight times to improve connections in Lima, said company officials.
While LATAM is keen to leverage its strength as Lima’s largest carrier, where it accounts for about 53% of the seating capacity, the market’s second largest airline Avianca-TACA began basing a widebody Airbus A330 jet in Lima during late 2012 to boost capacity between Lima and Buenos Airs and its hub in Bogota. A second widebody will be placed in Lima in 2013 to to expand capacity between Lima and Miami.
Lima J Chavez International Airport capacity by carrier (% of seats): 25-Mar-2013 to 31-Mar-2013
Source: CAPA - Centre for Aviation and Innovata
Lima is rising to a position of prominence in the networks of both LATAM and Avianca-TACA as means to partially compete with Panama, whereCopa enjoys a strategic advantage of connecting passengers between North and South America. Since both of Latin America’s largest airline groups now plan to bolster their connection capabilities in Lima, competitive pressure for both companies is likely to intensify in the short term as Avianca-TACA works to strengthen its presence in the market and LATAM ensures its retains its commanding share.
See related article: TACA continues expansion in Peru with A330s ahead of rebranding as Avianca
[h=2]A promising rebound in the Brazilian domestic market[/h]Pressure in LATAM’s international markets during 4Q2012 was somewhat counter-balanced by improvement in the company’s performance in the Brazilian domestic market, which was weak throughout the majority of 2012. Although TAM’s 4.2% reduction during 4Q2012 in ASKs was 11.3ppt below the 15.5% cut ushered in by its main Brazilian domestic competitor Gol (partially due to the shuttering of Gol’s subsidiary Webjet in Nov-2012), TAM’s traffic grew by nearly 12% while Gol recorded a 9% decline in its traffic. LATAM said it is working to improve revenue management within the different passenger segments in the Brazilian domestic market, with an emphasis on stimulating demand among price sensitive travellers.
LATAM predicts it will continue to improve its performance in the Brazilian domestic market during 2013, and estimates a double-digit unit revenue increase year-over-year.
LATAM Airlines Group operating performance year-over-year in the Brazil domestic market: Oct-2011 to Feb-2013
Source: LATAM Airlines Group
LATAM plans to reduce ASKs in the Brazilian domestic market by 5%-7% during 2013 as company executives stressed that capacity discipline is key to regaining profitability in Brazil. Gol’s planned capacity reduction is slightly more pronounced than its rival as it expects to cut domestic ASK growth between 8% and 10% in 2013.
Both of Brazil’s largest carriers have declared that their fortunes in the domestic space will improve during 2013. Gol has joined its rival in predicting that its unit revenues will rise by double digits during 2013 and is encouraged that even smaller regional carriers including Azul-TRIP andAvianca Brazil are slowing down their capacity growth.
Gol is encouraged that the domestic market will strengthen during 2013 as evidence by its 10% unit revenue growth in Jan-2013 and a 14% year-over-year increase during Feb-2013. The trends appear positive as the majority of Gol’s operations are centred in the Brazilian domestic market.
See related article: Gol pledges a financial turnaround as it records a second annual loss, USD745 million
[h=2]LATAM’s 4Q2012 profits are hurt by integration charges[/h]LATAM during 4Q2012 recorded a profit of USD8.% million after recording USD21.9 million from transaction expenses and USD52.7 million in aircraft sales and redelivery costs. Factoring out those special items LATAM posted a USD115 million net profit even as revenues remained roughly flat at USD3.4 billion.
LATAM Airlines Group financial results: 4Q2011 vs 4Q2012
Source: LATAM Airlines Group
Company executives estimate that LATAM should achieve USD250 million to USD300 million in merger synergies during 2013, and the group remains on track to achieve its full USD600 million to USD700 million synergy target in 2016. However, the group will incur certain integration expenses as it makes progress on its synergy goals.
There is also an evaluation under way of the combined carrier’s fleet plan in response to the competitive and macroeconomic environment. Presently, the company’s projections indicate a combined fleet of 323 aircraft by year-end 2013, a decrease of four shells from year-end 2012.
LATAM Airlines Group fleet projections: 2012 to 2015
Source: LATAM Airlines Group
LAN and TAM officially merged in Jun-2012, which means that the two companies are not terribly far along in the process of maximising their respective fleets and networks to really produce any meaningful results from the new LATAM Airlines Group. While there seems to be some miscalculation in the reaping the benefits of spooling-up the US-Brazil market, there are important pieces in place for LATAM to meet its synergy targets.
With Brazil’s domestic market improving, TAM’s jump from Star to oneworld and the company’s leading position in Lima, benefits from the merger should surface in 2013. The usual risks of high fuel prices, currency fluctuation and aggressive competition could continue to pressure the group during 2013, but its heft and scope as the preeminent airline group in Latin America puts LATAM in a strong position to weather potential obstacles that could pressure its results.
LAN Airlines (LA, Santiago de Chile Int'l) and TAM Linhas Aéreas (JJ, São Paulo Congonhas) will begin the transition into a singular brand before the end of the year LAN's CEO, Ignacio Cueto, has said. Speaking to Colombia's El Tiempo newspaper, Cueto said LATAM Group management is working hard to find a suitable name that will unify the LATAM brand but which "will not necessarily be that of TAM, LAN, or even LATAM."
The CEO went on to add that the creation of a single brand would also better facilitate promotion of the group companies. It will also allow passengers to better identify the group's network of destinations, particularly in places where they are less well known, he said.
LAN and TAM merged in 2012 to create the world's second largest airline by market value.
LATAM Airlines Group includes LAN Airlines and affiliates LAN Perú (LP, Lima), LAN Argentina (4M, Buenos Aires Aeroparque), LAN Colombia (4C, Bogotá), LAN Ecuador (XL, Quito Int'l), LAN Cargo (UC, Santiago de Chile Int'l), Linea Aérea Carguera de Colombia (L7, Bogotá), MAS Air (M7, México City) and ABSA Cargo (M3, Campinas Viracopos) alongside TAM and its subsidiaries Pantanal Linhas Aéreas (GP, São Paulo Congonhas), TAM Airlines (PZ, Asuncion) and TAM - Táxi Aéreo Marília (São Paulo Congonhas).
CH-aviation
The CEO went on to add that the creation of a single brand would also better facilitate promotion of the group companies. It will also allow passengers to better identify the group's network of destinations, particularly in places where they are less well known, he said.
LAN and TAM merged in 2012 to create the world's second largest airline by market value.
LATAM Airlines Group includes LAN Airlines and affiliates LAN Perú (LP, Lima), LAN Argentina (4M, Buenos Aires Aeroparque), LAN Colombia (4C, Bogotá), LAN Ecuador (XL, Quito Int'l), LAN Cargo (UC, Santiago de Chile Int'l), Linea Aérea Carguera de Colombia (L7, Bogotá), MAS Air (M7, México City) and ABSA Cargo (M3, Campinas Viracopos) alongside TAM and its subsidiaries Pantanal Linhas Aéreas (GP, São Paulo Congonhas), TAM Airlines (PZ, Asuncion) and TAM - Táxi Aéreo Marília (São Paulo Congonhas).
CH-aviation