LAN Airlines stated (16-Jul-2012) its first Boeing 787, which the company is expected to receive before the end of 2012, exited the paint shop of the Boeing factory in Everett with full livery completing the last phase in the assembly process. LAN will be the first airline in Latin America to receive the type, with the first delivery expected in late 2012 and delivery of 32 total aircraft over the next 10 years. This represents an investment of US3.5 billion and marks one of the largest investments in the company’s history. The configuration of the cabin on the first LAN 787-8 aircraft will include 217 economy class seats and 30 seats for premium business class. The destinations the LAN 787-8 will service during its first year of operations will be Santiago, Buenos Aires, Lima, Los Angeles, Madrid and Frankfurt. These routes will be gradually integrated during the aircraft’s first year of service. [more - original PR] [more - CAPA Analysis]
LAN 787 completes assembly; Santiago, Buenos Aires, Lima, LA, Madrid, Frankfurt initial destinations
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Avianca’s optimism rests on robust load factors, particularly on long haul routes from its largest market – Colombia –to the US and Europe. Demand is also picking up in South America as travellers adjust to the effects of currency depreciation that, while improving, have become a mainstay in many markets in the region. Avianca’s booking trends for Nov-2016 and Dec-2016 indicate that positive momentum is continuing into 4Q2016.
The company faces changing dynamics in its largest market Colombia in late 2016 when Copa Airlines shifts its business model in the country to a low cost operation in order to compete more effectively. Avianca seems unconcerned about Copa’s change in strategy, citing its strong position in Colombia despite increased competition arising in the country’s domestic market during the last few years.
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Mexico’s largest airline, Aeromexico, plans slightly higher capacity growth in 2016, mostly driven by added frequencies to its long haul markets in Asia and Europe. Its preliminary guidance shows an ASK increase in the low single digits versus 8% growth in 2016. Similarly to 2016, much of Aeromexico’s capacity should be deployed to international markets as the airline sheds three Boeing 777 widebodies and adds five 787-9s to its fleet.
Aeromexico and Delta continue to believe US regulators will approve their immunised cross-border joint venture by YE2016, and are planning to increase their combined daily flights between the two countries by 43% during the next two years. The joint venture is a major pillar of Aeromexico’s transborder strategy going forward as Delta prepares to exert more influence over Aeromexico’s strategy. Some of Aeromexico’s and Delta’s rivals are lobbying for the two airlines to relinquish more slots at Mexico City Juarez, which could become a factor in the government’s final decision.
In the near term Aeromexico’s outlook is relatively stable, despite continuing challenges from the depreciation of Mexico’s currency. The airline’s revenue generation for the 9M ending Sep-2016 was favourable, driven by increases in yields and load factors.
NOTE: This report was prepared before the DoT issued its decision in the Aeromexico-Delta joint venture