Peru

Leaders in one of the best performing economies in the region

Peru once again on 2016 stood as one of the top performing economies in the region, closing the year with a GDP growth of around 3.8% (versus 3.3% in 2015), according to estimates prepared by the International Monetary Fund (IMF). In this context, domestic market passenger air traffic continued to grow, reaching over 10 million persons transported during the period.

With its 17-year presence in Peru, the bargain air tariff model promoted by the LATAM Group as of the year 2006 has been decisive in the growth of its domestic market, which tripled during the last decade.

With 6.6 million passengers transported in domestic flights (6.7% more than in 2015), LATAM Airlines Peru remained the main operator of these routes with a market share of 61.4%. Its main competitors are Peruvian Airlines and Avianca; which, during this period, reached market shares of 12.5% and 11.9%, respectively, followed by LC Peru with 8.4% and Star Peru with 4.5%.

Its consolidated passenger traffic (RPK) grew 6.5% and its capacity (ASK) increased by 8.0% as compared to 2015; consequently, the occupation factor stood at 80.4%, with a drop of 1.2 percentage points with respect to the previous year.

LATAM Airlines Peru serves 17 destinations in the country, offering a varied range of daily flights aimed at meeting the demand and generating greater passenger traffic.  For example, it offers 22 daily flights to Cusco, 10 to Arequipa, 6 to Piura, 5 to Iquitos, 4 to Chiclayo, Juliaca, Tarapoto and Trujillo, 3 to Tacna and Pucallpa, 2 to Ayacucho, Cajamarca, Puerto Maldonado, Tumbes and Talara.

In September 2016, the Company opened up its domestic destination number 17 upon launching its new route to Jaen (Cajamarca province), with one daily flight from Lima.  This was possible thanks to the improvements introduced by the Civil Aeronautics Board (DGAC, in its Spanish acronym) and Peru’s Corporation of Airports and Commercial Aviation (CORPAC, in its Spanish acronym) in this city’s air terminal located in Northeast Peru, whose touristic attraction is the archaeological site of Kuelap. In this manner, the Company made progress in its objective to continue to improve domestic connectivity, offering more flight options to Peruvians, while contributing toward the country’s tourism and commercial development.

In order to serve its domestic operations, it deployed a fleet of 18 Airbus aircraft of the A320 family, one more than in 2015.  As part of its continued passenger service improvement, during this period LATAM Airlines Peru launched its projected fleet renewal plan incorporating, during the month of October, five modern Airbus A320 to replace an equal number of Airbus A319 that remained in operation to that date.  With a 174-passenger seat capacity, versus 144 in the A319, these aircraft enables transporting more persons without increasing frequencies, while introducing significant advantages in terms of efficiency and passenger comfort.

Among the most important milestones of the year, it is worth highlighting the acknowledgment obtained by LATAM Airlines Peru, for the second consecutive year, as one of “Peru’s most admired 2016 companies” (EMA, in its Spanish acronym), in its fifth edition, ranking 5th in the international ranking prepared by PwC Peru and Revista G de Gestión management journal, a distinction that corresponds to an evaluation made by 4,500 country executives (from 1,500 companies) through a survey that determines corporate performance according to eight fundamental attributes in order to be considered of excellence.  Additionally, the Company was chosen among the country’s top 10 companies to work in and was ranked N°11 in the ranking of the 15 top 2016 Merco Preferred Employers (corporate reputation).

Moreover, for the second consecutive year, LATAM Airlines Peru was distinguished with the award of Spain’s Co-responsible Foundation (Fundación Corresponsables de España) for its “Night Flights to Cusco with RNP (Required Navigation Performance) technology” project, within the scope of Corporate Social Responsibility (CSR).  The RNP system applied to the Lima-Cusco route since September 2013 is an example of the Company’s ongoing revenue generation practices.  This technology uses advanced avionics (a discipline that studies the electronic techniques that are applied in air navigation) capacities and is supported via satellite guidance, permitting more precise routes while operating safely under low visibility conditions, avoiding flight delays and cancellations.

On the other hand, for the third consecutive year, LATAM Airlines Peru became the only transportation company in the country and in South America to be distinguished as a Socially Responsible Company (ESR®), awarded by Peru’s 2021 Civil Association in Mexico’s Center for Philanthropy (CEMEFI, in its Spanish acronym).  This recognition is given to companies that voluntarily and publicly undertake to apply socially-responsible management practices as part of their own corporate culture and business strategy.

The company was also awarded first and second place in the Spot & Online Video category of the 2016 DIGI Awards for its “Christmas in airplane mode” and “I love you to the sky” campaigns, respectively.

Peru

6,6 millions of passengers

18 airplanes

17 destinations

61% market share