During the year 2016 air transport operations in Chile registered a dynamic behavior, which was reflected in the record number of passengers transported within the country, representing 10.6 million people and a growth of 9.4% (without considering Easter Island) when compared to the previous year, according to statistics prepared by the Civil Aeronautics Board (JAC, in its Spanish acronym). Although the local economy had a poor performance, with a GDP of 1.7% according to International Monetary Fund estimates, the sustained tariff reduction applied by the industry at large in recent years has been key in stimulating domestic air travel demand and, consequently, increased domestic air traffic.
Chile’s aero-commercial policies allow all companies to enter the market provided that they meet certain technical requirements, where each airline is free to develop its own business; a situation that has also allowed introducing new low-cost business models in the market, both for domestic as well as international routes.
In this environment of increased competition, LATAM Airlines Chile has remained the leading operator in domestic routes, thanks to its continuous efforts to offer competitive rates, while maintaining its differentiated service proposal focused on customer satisfaction. This is how in 2016 the company transported more than 7.8 million passengers, 8.8% more than in 2015, reaching a market share of 73.1% measured in passengers carried, with a drop of 0.4 percentage points when compared to the previous year. On domestic routes it competes mainly against SKY Airlines, which this year raised its participation to 25.9%.
The Company’s consolidated passenger traffic (RPK) grew 9.6% and its capacity increased 10.0% measured in ASK (seats per kilometer), as compared to the previous year; moreover, as a result of the foregoing, its average occupancy factor stood at 83.0%, similar to that obtained in 2015.
LATAM Airlines Chile serves 16 domestic destinations (not considering Easter Island), covering the main cities from north to south such as Santiago, Arica, Iquique, Calama, Antofagasta, Copiapo, La Serena, Concepcion, Temuco, Valdivia, Osorno, Puerto Montt, Castro, Balmaceda, Puerto Natales and Punta Arenas. It should be noted that Puerto Natales, located in the southernmost part of the country, south of the Chilean Patagonia, was inaugurated in December, initially with two weekly flights from Santiago and in January 2017 were expanded to four such weekly frequencies, which remained operational until February 2017.
With the opening of this new route, the Company seeks to continue to contribute to the development of the nation and its regions, and to draw all passengers near to one of the world’s main tourist attractions, both national and international. According to National Geographic, Puerto Natales is the fifth most beautiful place on Earth, and more than five million people voted for it as “the eighth wonder of the world” in a survey conducted by the online travel guide Virtual Tourist.
Likewise, in 2016 the company significantly increased tourist route opportunities (17% more seats than in the previous year), including flights to Arica, Iquique, Puerto Montt, Castro, Balmaceda, Puerto Natales and Punta Arenas. This was partly accomplished by increasing flight frequencies in these markets and also by using a greater percentage of A321 aircraft, with a capacity for 220 passengers; 46 seats more than the A320.
In the same vein, LATAM Airlines Chile modified its itinerary by offering a direct flight to the island of Chiloe (formerly with a stopover in Puerto Montt), reducing by more than one hour the time of travel to this island destination.
In order to serve its domestic routes, the company used a fleet composed by 27 aircraft of the Airbus A320 family, two more than in the previous year. During this period, four A321 aircraft joined the fleet, completing a total of 12 aircraft of this model by the end of the year. The Airbus A321 is the largest and most modern aircraft of this family whose technology, materials and aerodynamics allow a more efficient operation, a strong reduction of CO2 emissions and lower fuel consumption.
On its Easter Island route, on the other hand, the Company has been using its Boeing 787 Dreamliner since 2015.
It should be noted that LATAM Airlines Chile’s entire fleet has been equipped with a modern on-board entertainment system upon installing, during the first quarter of the year, IFE Wireless technology in all its aircraft used to serve its domestic flights.
7,8 millions of passengers
73% market share