MercoPress. South Atlantic News Agency

LAN reiterates interest in Argentine market.

In spite of the failed negotiations for the acquisition of Argentine airline American Falcon, Lan Chile reiterated its interest in having access to the Argentine market.

With this in mind Lan admitted it's considering other options such as, association with an Argentine domestic airline, the creation of a new company with Argentine partners or an open skies policy".

Apparently Lan auditors are looking into Southern Winds airline, SW, which is also interested in acquiring Lafsa, Lineas Aereas Federales, S.A., successor of the bankrupt Lapa and Dinar. Lafsa was recently granted authorization to fly to the Falkland Islands by the Argentine government.

SW option over Lafsa concludes next September.

Actually the Lan project to buy into American Falcon fell through when at last minute the company decided not to sell a 34% holding since partners "will be contributing the financial support needed for the company's expansion".

Lan, Chile's flag carrier is considered the most profitable Latinamerican airline and was recently nominated the best airline of Central and South America and the Caribbean by the prestigious Official Airline Guide. This is the fourth time Lan receives this honour and this year was also selected among the world's leading airlines.

The company's May preliminary figures indicate that the passenger-miles index jumped 19,9% and capacity 15%, with an occupational factor of 64,8%.

International flights passenger-miles index expanded 22% with an occupation rate of 66% and in domestic flights expansion was 9,4% and occupancy reached 58,9%.

Freight volume increased 28,8% and 87,6% of all Lan flights left just on time, a 2,5 points increase over May 2003.

Merrill Lynch said that Lan's cost structure compares favourably with other world airlines and "has a 40 to 60% cost advantage over its South American competitors"