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LAN Airlines
LAN Airlines
LAN Airlines
LAN Airlines
LAN Airlines
LAN Airlines
LAN Airlines
LAN Airlines
LAN Airlines
LAN Airlines
LAN Airlines
LAN Airlines
LAN Airlines
LAN Airlines
LAN Airlines
LAN Airlines
LAN Airlines
LAN Airlines
LAN Airlines
LAN Airlines
LAN Airlines
LAN Airlines
LAN Airlines
LAN Airlines
LAN Airlines
LAN Airlines
LAN Airlines
LAN Airlines
LAN Airlines
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LAN Airlines

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  • 1. University of Nebraska - Omaha Airline Operations – AVN 2020 Presented by: Ethan Schaecher April 2012 “El espíritu de América del Sur” LAN Airlines
  • 2. University of Nebraska - Omaha Airline Operations – AVN 2020 OUTLINE 2 Brief History Operations S.W.O.T. Analysis 2012 & Future  General, Fleet, Codeshare Agreements, Destinations, Business Tri-Model  Strengths, Weaknesses, Opportunities, Threats
  • 3. University of Nebraska - Omaha Airline Operations – AVN 2020 HISTORY 3 o LAN Airlines  Founded by Commodore, Arturo Merino Benítez in 1929 – Línea Aeropostal Santiago-Arica  Began as a state-owned corporation & provided services to passengers, cargo, & mail.  Took name Línea Aérea Nacional de Chile (LAN Chilé) - 1932
  • 4. University of Nebraska - Omaha Airline Operations – AVN 2020 HISTORY 4 o LAN Airlines  60 years later (1989) Chilean government sold 51% of its shares to national investors & the Scandinavian Airline System – privatization.  The privatization process ended in 1994  Current partners, company controllers, & other main shareholders acquired 98.7% of company’s assets.  LAN Chilé then began a process of expansion & internalization  Acquired Chile’s second airline, Ladeco, in 1995
  • 5. University of Nebraska - Omaha Airline Operations – AVN 2020 HISTORY 5 o LAN Airlines  In 2000, LAN Chilé became member of OneWorld™.  More global reach  Also in 2000, LAN Chilé began its Airbus passenger fleet renovation program – 27 new aircraft
  • 6. University of Nebraska - Omaha Airline Operations – AVN 2020 HISTORY 6 o LAN Airlines  In 2004, LAN Chilé and its subsidiaries (LAN Peru, Ecuador, etc., became unified under single LAN Brand. (LAN Airlines)  Opened its most recent subsidiary, LAN Argentina, in 2005  In 2010, LAN Airlines acquired the Colombian airline, AIRES.
  • 7. University of Nebraska - Omaha Airline Operations – AVN 2020 OPERATIONS 7 GENERAL o LAN Airlines  HUB: Santiago, Chilé (Comodoro Arturo Merino Benítez International Airport)
  • 8. University of Nebraska - Omaha Airline Operations – AVN 2020 8OPERATIONS o LAN Airlines Subsidiaries  Cargo (13 Freighters) • LAN Cargo • ABSA – Aerolinhas Brasileiras • Florida West International Airways • MasAir • LANCO  Passenger (118 Aircraft) • LAN Express (Formerly Ladeco) • LAN Peru • LAN Ecuador • LAN Argentina • LAN Colombia GENERAL
  • 9. University of Nebraska - Omaha Airline Operations – AVN 2020 9OPERATIONS o LAN Airlines  Member of OneWorld™ Alliance • Generate more value for members’ customers, shareholders, and employees than any airline can achieve by itself • Smooth transfer for passengers traveling across member airlines • Greater range • Of the 3 global airline alliances, OneWorld is rated #1 by Skytrax & Global Traveler. GENERAL
  • 10. University of Nebraska - Omaha Airline Operations – AVN 2020 10OPERATIONS o LAN Airlines  Other Members of OneWorld™ Alliance: • American Airlines • British Airways • Canadian Airlines • Cathay Pacific • Quantas • Japan Airlines • Royal Jordanian • Malév GENERAL
  • 11. University of Nebraska - Omaha Airline Operations – AVN 2020 11OPERATIONS o LAN Airlines Current Fleet  Airbus 340 Tour • 360 View  Boeing 767 Tour • 360 View Fleet Notable Aircraft Routes Bombardier 8Q-100,200,400 Domestic (for LAN Colombia) Airbus 340-300 Europe, Oceania (To be replaced by Dreamliner) Boeing 767-300 Europe, N.A., Caribbean (To be replaced by Dreamliner) Airbus 320-200 Dom., Reg., S.A. Airbus 319-100 Domestic, Regional Airbus 318-100 Domestic, Regional Boeing 787-8&9 Dreamliner Europe, Oceania, N.A., S.A. (Ordered)
  • 12. University of Nebraska - Omaha Airline Operations – AVN 2020 12OPERATIONS Codeshare Agreements o LAN Airlines Codeshare Agreements  AeroMéxico  Alaska Airlines  American Airlines  British Airways  Cathay Pacific  Iberia  Jet Blue – March 2011  Japan Airlines  Quanta  Finnair
  • 13. University of Nebraska - Omaha Airline Operations – AVN 2020 12OPERATIONS Destinations o LAN Destinations  South America • S.A. Route Map  North America • N.A. Route Map  Europe, Oceania • Europe & Oceania Route Map
  • 14. University of Nebraska - Omaha Airline Operations – AVN 2020 12OPERATIONS Business o LAN Airline’s Business Model  Has succeeded where rivals have failed  Has a unique cargo/passenger integration  Cargo made up 31% of LAN revenue in 2011 (less than 5% in American, Delta, United) Full-Service International Passenger Air Cargo No-Frills Domestic- Passenger
  • 15. University of Nebraska - Omaha Airline Operations – AVN 2020 12OPERATIONS Business o LAN Airline’s Business Model  Air Cargo is far lower in domestic markets  Fairs lowered on domestic flights made possible by basic service  Demand has dramaticaly increased. Full-Service International Passenger Air Cargo No-Frills Domestic- Passenger
  • 16. University of Nebraska - Omaha Airline Operations – AVN 2020 12OPERATIONS Business o No Frills Domestic – Air Cargo – Full Service International  Domestic Demand Increase • LAN Chilé – 83% • LAN Peru – 123% • LAN Argentina – 200%
  • 17. University of Nebraska - Omaha Airline Operations – AVN 2020 12OPERATIONS Business o No Frills Domestic – Air Cargo – Full Service International  Maximal Use of Physical Assets – Example • Miami-Santiago, Chilé – PAX/Cargo • Continues to another S.A. city (Buenos Aires) • Delivers more U.S. cargo there • Returns to Santiago with more customers & new cargo for U.S. • Santiago-Miami or NYC (night flights & new cargo)  Meanwhile, competitors with no cargo operation are forced to park their aircraft at Santiago’s airport most of the day.
  • 18. University of Nebraska - Omaha Airline Operations – AVN 2020 12OPERATIONS Business o No Frills Domestic – Air Cargo – Full Service International  Numbers & Comparisons • Complementary, not separately • 1993-2010: 17% compound revenue growth (318 Million to 4.2 Billion) • Market Capitalization $8.9 Billion (3/11) • Now exceeds most global rivals: • American – 2.2 Billion • U.S. Airways – 1.5 Billion • British Airways – 6.9 Billion • United/Cont. – 8.1 Billion  From 1998 – 2010, LAN’s share price has grown by more than 1,500%
  • 19. University of Nebraska - Omaha Airline Operations – AVN 2020 S.W.O.T. Analysis - LAN 13 INTERNALEXAM EXTERNALEXAM SWOT W O T S POSITIVE INFLUENCES NEGATIVE INFLUENCES Strengths Weaknesses Opportunities Threats
  • 20. University of Nebraska - Omaha Airline Operations – AVN 2020 S.W.O.T. Analysis - LAN 14 Market Leadership Strong Financial Performance Diversified Operations Higher Turnover Ratios Strengths:
  • 21. University of Nebraska - Omaha Airline Operations – AVN 2020 S.W.O.T. Analysis - LAN 15 Lack of Scale Compared to Peers Weak Presence in Asia Weaknesses:
  • 22. University of Nebraska - Omaha Airline Operations – AVN 2020 S.W.O.T. Analysis - LAN 16 Growth in International Tourist Arrivals Increasing International Cargo Traffic Global Airline Market Opportunities:
  • 23. University of Nebraska - Omaha Airline Operations – AVN 2020 S.W.O.T. Analysis 17 Rising Aviation Fuel Prices Intense Competition & Price Discounting Cargo Price-Fixing Investigation High Interest Rates Threats:
  • 24. University of Nebraska - Omaha Airline Operations – AVN 2020 2012 & FUTURE 18 o LAN doubling its aircraft expenditure in 2012  1.76 Billion for 23 aircraft • 12 Airbus A320 – Dom.& Reg. Routes • 9 Boeing 767-300s • 2 Boeing 787-8 Dreamliners – Long Hauls o LAN selling 5 Airbus 318s, returning 2 Boeing 767-300s & 3 737-700s to lessors
  • 25. University of Nebraska - Omaha Airline Operations – AVN 2020 2012 & FUTURE 19 o According to IATA, In 2011, Latin America was the only world region in which demand growth outstripped capacity growth – 10.2% rise in air passenger traffic.
  • 26. University of Nebraska - Omaha Airline Operations – AVN 2020 2012 & FUTURE 20 o Approved in Dec. 2011, LAN & TAM approved a merger agreement. o LATAM Airlines o Synergy estimates predict 600-700 Million/YR o Mega-airline will control 40% of Latin America’s air passenger market.
  • 27. University of Nebraska - Omaha Airline Operations – AVN 2020 RECAP 21 Brief History Operations S.W.O.T. Analysis 2012 & Future  General, Fleet, Codeshare Agreements, Destinations, Business Tri-Model Harvard Business Review  Strengths, Weaknesses, Opportunities, Threats
  • 28. University of Nebraska - Omaha Airline Operations – AVN 2020 RECAP 21
  • 29. University of Nebraska - Omaha Airline Operations – AVN 2020 Presented by: Ethan Schaecher April 2012 “El espíritu de América del Sur” LAN Airlines

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