Roberto Alvo, CEO LATAM Airlines Group, says it is possible for aviation to increase air connectivity while reducing its environmental impact. Interview by Graham Newton.
Is it difficult to create a single brand when you have different entities?
I think having a single brand operating different entities is an operational and cultural advantage. We provide our customers with a unique and consistent value proposition, a better delivery of seamless traveling, and a deeper, more compelling sense of belonging.
What is more challenging is associating the brand to the different countries where we operate domestically. Latin America has a long-standing tradition of having carriers identified with their respective countries and as the only truly South American airline group we need to realize the opportunity to become the flag carrier to a region.
Tell us about your restructuring and whether you are happy with your financial performance?
We completed our restructuring in November 2022. Despite the very difficult times we all endured, I am very proud of how LATAM has emerged as a group. We are stronger than in 2019. It is a leaner organization with a very solid balance sheet and we are very agile as a group.
As our public financial results show, LATAM is performing solidly post Chapter 11. The strength and diversity of the business model has been a critical factor. In addition, the group s more competitive cost structure and network strength have enabled our affiliates to maintain significant market shares and at the same time take advantage of growth opportunities that have arisen LATAM Airlines Colombia s recent expansion being an example.
This financial strength ensures that we can navigate the uncertainties that may still lie ahead, while allowing us to embrace future opportunities.
How important is the relationship with Delta to your future success?
The Joint Venture with Delta has allowed LATAM to strengthen its presence in the fiercely competitive North American Market, delivering substantial benefits for both airlines and our passengers.
In the first year of the partnership, we have launched six new routes, operated 15,000 flights, and transported more than 3 million customers.
Since October 2022, LATAM and Delta have increased their seat offering 75% and are leading the capacity share for service between the United States and South America.
The result is the best connectivity between North and South America in the industry, uniting more than 120 destinations served by LATAM with more than 200 North American destinations operated by Delta.
Has cargo become more important to you and how do we improve digitalization in this sector?
Cargo has always been at the core of our strategy as we recognize the synergy it generates for our passenger network and the important role air cargo plays in our region s economy.
During the pandemic, we continued to invest in freighter expansion, enhancing our product capabilities, and modernizing our IT legacy systems, despite the difficult circumstances. Digitalization became one of our top priorities, enabling us to streamline collaboration with customers through eBooking, IATA’s EDI standards, e-freight programs, and real-time e-tracking.
What are the main challenges and opportunities in the Americas?
The macroeconomic context and the socio-political reality of the region continues to be challenging. The world is still recovering from the effects of the pandemic, economic stagnation, and economic shocks from armed conflicts that can affect passenger demand and profitability.
There is also a need to invest in modernizing airport infrastructure and, of course, the existential question of how to decarbonize the industry in a sustainable way.
I want to take advantage of this last point to talk about the opportunities. With six of the 10 most biodiverse countries on the planet, South America is uniquely positioned to provide nature-based solutions that could not only serve as a source of carbon credits but also offer the industry an opportunity to make a real difference in terms of supporting conservation projects.
Furthermore, it has the potential to be a global leader in the production of sustainable aviation fuels (SAF) due to its available natural resources and wealth in renewable energies. For this to happen, it is necessary for both public and private stakeholders to collaborate, play their roles, and dare to lead the energy transition that the industry requires.
Can the region become a major producer of sustainable aviation fuels and what can governments do to accelerate the process?
South America has tremendous potential for the development of SAF, but government leadership is key.
In South America, there are only nascent and often disparate policy discussions. For example, there is no commercial SAF production and though there are a number of early-stage projects, they are unlikely to reach a critical mass in the near future.
A strategic approach is needed by governments to ensure a balance between decarbonization and aviation’s continuing contribution to connectivity and socio-economic development.
This is no easy feat. That s why, together with Airbus, we have financed an MIT study to evaluate options in the region and potential public policy alternatives…
