MercoPress. South Atlantic News Agency

LAN unveils three year plan to invest 1.3 billion USD to expand fleet

Chile's flag air carrier LAN announced on Friday it will invest 1.3 billion US dollars between 2009 and 2011 to expand its fleet. LAN, which has operations across South America, will buy long- and short-haul planes as well as new-generation cargo aircraft, Chairman Jorge Awad said.

“These investments represent a firm bet on the future, aimed at boosting our competitive advantages,” Awad told a shareholders' meeting in Santiago.

Awad said LAN is trying to fend off global financial crisis by offering domestic services in Ecuador and expanding its cargo business in Colombia and Brazil. The company already has affiliates in Peru and Argentina.

LAN which was started in 1929 has a dominant position in Chile accounting for more than half of Chile’s international passenger traffic and nearly three quarters of domestic traffic.

“The development of new markets, the modernity of its fleet and financial solvency will enable LAN to keep producing significant results within global commercial aviation,” Awad said.

Awad said the first half of 2009 will be a challenge, but said the outlook for the second half is better due to lower fuel prices and a fleet of more fuel-efficient planes.

“We know that the first half will be more difficult than the second, but ... we are betting on seeing significant results in 2009 which will keep our long-term development plan on track,” he said.

LAN passenger traffic rose 7.6% in March from a year earlier, thanks to the performance of its operations in Chile, Argentina and Brazil, but that is well short of the double-digit increases it saw for much of last year. Cargo traffic fell 24.2% in March year-on-year.

LAN started the domestic cargo operations in Brazil last month. LAN's cargo network covers about 75% of destinations worldwide.