Executive Briefings

LAN, TAM Merger Has Implications for Airfreight Industry

South American carriers LAN Airlines and TAM have banded together, forming the LATAM Airlines Group, reportedly the largest airline group in South America. The combined LAN Cargo, which has three smaller affiliate carriers, and TAM Cargo will now be able to offer routings to 169 cities around the world.

Closing costs for the companies may approach $200m, but this number will be vastly offset by an expected synergy of up to $700m four years down the road. More than half of this money will come from cargo and passenger revenue increases. For now, each airline is staying in its present headquarters and will continue to operate as separate brands.

"This is the beginning of a long journey, and the benefits to our customers will be added gradually as the integration of our companies progresses," the new executive vice president and CEO of LATAM Airlines Group, Enrique Cueto, said in a statement. Cueto formerly served as the CEO of LAN.

According to the two companies, combining their cargo operations will bring with capacity capacity, a modern infrastructure and broader access to e-systems. Creating a wider reach is at the heart of the merger, which has been moving slowly forward for years.

Read Full Article

Closing costs for the companies may approach $200m, but this number will be vastly offset by an expected synergy of up to $700m four years down the road. More than half of this money will come from cargo and passenger revenue increases. For now, each airline is staying in its present headquarters and will continue to operate as separate brands.

"This is the beginning of a long journey, and the benefits to our customers will be added gradually as the integration of our companies progresses," the new executive vice president and CEO of LATAM Airlines Group, Enrique Cueto, said in a statement. Cueto formerly served as the CEO of LAN.

According to the two companies, combining their cargo operations will bring with capacity capacity, a modern infrastructure and broader access to e-systems. Creating a wider reach is at the heart of the merger, which has been moving slowly forward for years.

Read Full Article