Chile's flag carrier LAN airlines increased the share of its Argentine affiliate to 70%, following 2006 reforms to the Argentine Aeronautical code authorizing foreigners to have a majority stake in commercial airlines, reports the Buenos Aires press.
LAN Argentina currently holds 15% of the country's domestic flights market while Aerolíneas Argentina, currently under control of the Spanish tourism group Marsans is the dominant airline with an 80% share. LAN, which begun operating in Argentina as a local company in June 2005 has since become Aerolíneas main competitor in the country. Local associates of LAN, Jorge Perez Alati and Manuel Benitez who originally held 51% of the company have fallen back to 30% following several capital increases. With Aerolineas Argentinas and LAN dominating 90% of the country's domestic flights, the Argentine commercial air industry is now in foreign hands. Only two local companies operate in the five million travelers' annual market, with a 5% share. One of the biggest airlines in Latin America with affiliates in Ecuador, Peru and Argentina, LAN is also eyeing a foothold in the region's biggest aviation market, Brazil. LAN said last month it had extended 17.1 million US dollars in credit to Nova Varig, which operates routes previously owned by Varig -- the once mighty Brazilian airline which was driven close to bankruptcy due to massive debts. "We are currently involved in negotiations with Nova Varig shareholders and continue to evaluate the possibility of acquiring a stake in that company," LAN Chief Financial Officer Alejandro de la Fuente told financial analysts. "No decision has been reached yet. We will take a position once we have a clear perspective of the state of operations of New Varig." As one of the region's leading airlines Lan posted record quarterly earnings of 93 million US dollars, up 88% over the same October/December period. Net profit jumped 64.6% to 241.3 million US dollars in 2006 from 146.6 million dollars in 2005. Revenues in 2006, increased 21% to over 3 billion US dollars, with revenue from passenger traffic climbing 24.2%, and 17.8% from cargo transport.