MercoPress. South Atlantic News Agency

Lan Argentina “should be profitable” by end of 2006

Chilean flag carrier Lan Chile expects its Argentine subsidiary to become profitable towards the end of this year by capturing 30% of the air travel market.

"We expect Lan Argentina to reach an equilibrium point by the end of 2006 with annual revenues of 300 million US dollars", said Lan's Finance Manager Alejandro de la Fuente from Santiago.

He added Lan was hopeful that the company could expand and capture 30% of the Argentine air travel market by the end of 2006, from its current 12%.

"This year we will have a significant number of international links that should help feed the domestic lines".

In the last quarter of 2005 Lan, which besides Argentina also has operations in Peru, Ecuador and the Dominican Republic managed profits of 49.9 million US dollars, up 4.8% from the same period in 2004.

A special surcharge on tickets because of the increase in fuel costs helped boost the company's profits admitted Mr. de la Fuente.

Lan has a 49% control of Lan Argentina which she shares with two local investors.

The performance of Lan Argentina during the fourth quarter was described as "mixed", in spite of having lost 6 million US dollars, since its market participation increased but the international operations plan had to be delayed.

However, passenger occupation averaged 75% and the fleet's capacity increased 50% over the previous quarter.

Mr. De la Fuente said that Lan Argentina Buenos Aires/Miami link had to be postponed for the second half of 2006, following changes in air traffic security conditions in local airports.

"Maybe by the end of June we could be flying to Miami. Anyhow by the end of the year we will be flying to ten different destinations with twelve aircraft", pointed out Mr. de la Fuente, a considerable increase from the current "seven routes and five aircraft".