LATAM Airlines Peru CEO, Manuel van Oordt at the Airline Leader Summit Latin & Caribbean 2025

Transcript

Manuel van Oordt:Peru has been experiencing a very rapid growth over the last 25 years in terms of aviation industry. In the last 25 years, the amount of travelers, the passengers traveling in Peru have increased by 7 times, sevenfold. So we are now seeing around 30 million passengers each year, 17 million domestic passengers and 13 million international, growing at a rate of over 10% per year. So we're seeing very, very healthy growth. And we're also seeing great opportunity looking forward because we are still in the per capita figures of around the average in the region or below the region. So we're at 0.6 passengers per capita, whereas some of our neighbors are around 0.8 or 1 or 1.2. So, so we see a lot of growth potential and we see a history of very consistent and solid growth throughout the last 25 years. Well, we are several players in the domestic market. There's 19 cities that are covered domestically in Peru. LATAM has an important amount of coverage within the country. We proudly fly to all of those 19 cities and we have several flights today. So we're offering our customers several options of connection between the main cities. Now, Lima— Peru is a very centralized country. Lima is a big hub. It's also located geographically in the center of the country, so it makes a lot of sense for all of the connecting traffic between the cities to connect in Lima and have a very efficient experience to sustain the growth that we've been seeing in Peru in the last years. If you think of going forward 5, 10, 15 years down the line, traffic will double or triple. We're forecasting by 2040 we could see traffic at around 130 million passengers. So that requires a lot of infrastructure. We have struggled in the past for the airport infrastructure to catch up. The project of the Lima Airport was scheduled to open in 2005. It ended up opening in 2025. So that was a big delay in 20 years for that infrastructure. So what we need is now to make sure that we are building the same infrastructure and the same velocity looking into the future so that we can have not only the capacity and the infrastructure, but also a very high quality of service to our customers. There's an intention to charge for a connecting passenger tax. And we see— we think that from a perspective of the airlines and from LATAM specifically, we think that's a bad idea. We think that's— that will definitely not be able to, to encourage more passengers. More taxes are always bad for the consumers. We have seen in the last 15 years that while airfares have dropped significantly, airfares today are 30% lower than what they were 15 years ago. Nevertheless, airport taxes have doubled in those, in those 15 years. So if we add an additional tax for connecting passengers, that will definitely scare passengers away from connecting through Lima and transfer them to other hubs in the region that do not collect that transfer tax. Peru is still behind in the tourists, in the inbound tourist numbers. We're still seeing tourists coming to Peru are 30% lower than they were pre-pandemic. So we believe that another tax for connecting passengers will just simply not encourage passengers to connect through Lima and to come to Peru as a, as their vacation destination.

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