Air Transport World

South American spirit.

LanChile sets a new course aimed at combining the best of the Northern and Southern Hemispheres

LanChile was part of what Swiss psychoanalyst Carl Gustav Jung called a "significant coincidence" last year when it joined TACA and TAM to place the second-largest aircraft order ever received by Airbus Industrie. Together the three airlines signed for 179 airplanes of the A319/A320 family--90 firm orders and 89 options. LanChile's portion involves 20 firm orders and 40 options, the largest transaction ever by a Chilean carrier. Deliveries start in late 2000.

"We negotiated a very good deal," says LanChile CEO Enrique Cueto, "One of the disadvantages of a small carrier is that when it places an order for airplanes it pays the same per aircraft regardless if it is ordering two or three or four. That doesn't happen with the big carriers--it is different when you order 100 airplanes. So being small carriers, we got as good pricing as if we were big."

Synergy and cost advantages go beyond the purchasing deal because the three carriers defined the same basic specifications for their respective aircraft. "Spare parts will be jointly purchased and we will share maintenance," explains Cueto. "The agreement is so flexible that if one of us can't take a specific airplane at a scheduled delivery date, one of the other two can through a sublease arrangement among us."

The "significant coincidence" behind this joint purchase is that three of the most innovative and successful airlines in Latin America got together on this unusual form of aircraft ordering. TACA leads a pioneering alliance of five Central American carriers now known as Grupo TACA (ATW 8/97, p. …

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