LATAM Airlines Group S.A. is a champion of the airline industry in Latin America. In fact, from humble beginnings as air taxi service for the Chilean Military after having been founded by the first Commander-in-Chief of the newly created Chilean Air Force back in 1929, the Air Commodore Arturo Merino Benítez, the airline has grown tremendously since then through acquisitions and expansion of air routes including heavy investments swallowing competitors and increasing its fleet size. Moreover, tracing its formal origin as Línea Aérea Nacional de Chile and hence its abbreviation thereafter as LAN Chile since 1932, this flag carrier has grown steadily since then and is today the undisputed leader of aviation in Latin America. Accordingly, its closest competitor in the region with a longer history known as Avianca Holdings S.A. has roughly only half the size LATAM has nowadays in terms of fleet size, number of destinations serviced, number of employees, passenger traffic and yearly revenue, not to mention much healthier finances and a higher stock price attained by the latter. This is quite an accomplishment and difficult to describe track-record over 90 years of existence. Nevertheless, I can summarize the major breakthroughs the company has undergone in the following two paragraphs.
As a consequence, to make a long story short, LATAM operated for many years as a state-owned enterprise with excellent management all throughout its history in Chile under government hands. In fact, the company opened its first international air route to Buenos Aires, Argentina in 1945, reaching Miami International Airport by 1958. Likewise, modernizing its fleet under the direction of the government, the company bought its first Boeing jetliner in 1966 greatly expanding its fleet with state-of-the-art aircraft. Moreover, the Chilean government privatized the flag carrier during the Pinochet years in the late 1980s by selling a 51% ownership stake in the airline to SAS A.B., the parent company of Scandinavian Airlines. Thereafter, the company bought domestic player Fast Air Carrier S.A. in 1994 by issuing new common stock in LAN Chile S.A. while bringing on board in the process controlling Spanish-Chilean businessman Juan Cueto Sierra along with other investors including the incumbent President of Chile Sebastián Piñera Echenique, Chilean salmon mogul Ramón Eblen Kadis and the late local textile entrepreneur Boris Hirmas Rubio. Afterwards, the company bought a local competitor covering mostly domestic air routes in Chile known then as LADECO S.A. and monopolizing along the way the airline industry there while renaming the new wholly-owned subsidiary as LAN Express S.A. Similarly, having gone public on the NYSE, as an ADR under the ticker symbol (LTM), while raising $ 135 million in 1997, the airline holding group now trades in Chile and here in the US.
Furthermore, the company purchased Brazilian airline champion TAM Linhas Aéreas S.A. through a merger of equals in 2012. The latter was the leader of the Brazilian market having been operated since 1971 by the late air pilot Captain Rolim Adolfo Amaro, who acquired control of the small air taxi fleet known then as Táxi Aéreo Marilia S.A. through a stock swap and then transformed the air carrier into a titanic player in Brazil by expanding it cost-efficiently throughout several decades before his passing in 2001. Today, the mammoth successor airline widely known as LATAM is a champion regionwide reporting revenue of some $ 10 billion a year on average while containing the largest fleet by far of any airline in Latin America after reaching over 300 aircraft. In addition, LATAM reaches more than 100 destinations for passengers as well as freight, has a staggering 42,000 head count on its payroll and solidly possesses 11 wholly-owned subsidiary airlines registered in seven countries across South America including three cargo operations throughout the subcontinent. Altogether, the airline transports around 70 million passengers a year.
To conclude, LATAM holds strategic agreements with other airlines including cooperation with Air New Zealand Limited, a code sharing agreement with American Airlines Corporation, a training sharing agreement with Deutsche Lufthansa A.G. covering its aircraft maintenance operations and membership in the Oneworld Alliance. In addition, the company never ceases to look for synergies and slashing costs specially now after taking into consideration the projected long-lasting slump in air travel demand globally due to the current “Coronavirus Pandemic”. By the same token, it is important to highlight the fact that the current ownership of the flag carrier now includes players with robust aviation expertise such as Delta Airlines Corporation holding a 20% economic interest in the company and Qatar Airways Company Q.C.S.C. having a 10% shareholding in the business. Other current investors besides the controlling Cueto aviation clan include Ramón Eblen Kadis, Holding Bethia S.A., the Amaro family, Chilean pension funds and international investors holding ADRs in the company. Consequently, this level of technical know-how from members exercising control of the entity should enable the airline to maintain efficiency and cleverness in its operations going forward. Moreover, having rebranded all its planes under the brand “LATAM” in 2015, this airline is quite simply an admirable Chilean multinational truly achieving the concept where the sky is the limit after being such a dominant player in Latin America through careful implemented growth.