USA and Canada LAN
Think of top commercial airlines and you might be tempted to say Singapore Airlines, Cathay Pacific, Swiss, Lufthansa, Qantas or British Airways. In recent years, Arabian Gulf carriers Emirates, Etihad and Qatar Airways have joined the conversation. But Pablo Yunis, Vice President USA and Canada for LAN Airlines, says it’s time to look South. LAN Airlines, formerly LAN Chile, has now expanded its reach and created a pan-South American carrier with LAN Peru, LAN Ecuador and LAN Argentina under the LAN banner.
ET: Tell us about LAN.
Pablo Yunis: We have an 82-year history, so we have been around a while and have seen a lot. We were privatized 17 years ago and that’s when our fortunes and financial results changed for the better. Our vision is to be in the top 10 airlines in the world when people talk about quality. We are not a low cost airline, and we fly to and from South America to the world. In South America we fly to over 50 cities and we have four home markets including Chile, Argentina, Ecuador and Peru. In the U.S. and Canada we fly to Los Angeles, New York-JFK, Miami, Toronto and we recently added San Francisco. We are the only airline flying from San Francisco to South America nonstop. Globally we fly to Europe, Australia and even Tahiti!
ET: What’s LAN’s strategy?
Pablo Yunis: We focus on leisure and corporate travel. We fly to Easter Island, Iguazu Falls and Machu Picchu—so whether you’re traveling to South America, within South America, for business or for leisure, we can get you there. We have great access for leisure and business travelers, and we have the best network to get you wherever you want to go.
ET: Tell us about your premium product.
Pablo Yunis: Our top class is Premium Business. We are the only airline with exclusively fully-flat beds from the U.S. to South America. Some of the U.S. airlines are starting to install them but they don’t have them on all of their planes. People want a flat bed to sleep, not a slanted bed, and on LAN you always get a flat bed. Chile and Argentina are known for great wines and we pride ourselves on serving the best wines on our flights. We even started an in-flight magazine just about wine. Our amenity kits feature Bulgari products and we really pride ourselves on providing good service.
ET: How has LAN fared during the recession?
Pablo Yunis: We have made it through the crisis and kept our profitability. First of all, many of the countries in South America were doing quite well, and since we have such a large portion of the domestic market in those countries, that part of our business stayed strong. About 30 percent of our business is cargo, which is very high for commercial airlines. Thus, when our international passenger traffic dipped, the cargo market stayed strong for us. Lastly, because we focus on premium travel and have a very strong premium product, we were able to do better with travelers who value quality.
ET: What’s next for LAN?
Pablo Yunis: Our annual turnover is approximately $4.6 billion and growing by double digits, so we are expanding relatively fast. We will be the first South American airline to fly the Boeing 787 Dreamliner and we recently placed an order for 50 Airbus A320 version airplanes that will begin delivery in 2012. Today, our average fleet age is 5.8 years—among the youngest of any airline in the world—so when you get on a LAN plane, you know it is going to be relatively new. We were voted again by Skytrax “Best South American Airline,” and when I talk to customers they do compare us to Singapore Airlines and Cathay Pacific. In addition, we just launched a LANPASS Affinity credit card with U.S. Bank so our frequent fliers can earn more miles with us.
ET: With Mexicana’s bankruptcy, could that be an acquisition target for LAN?
Pablo Yunis: Mexico is a bit far to the North. There are other markets that would be more natural if we enter any of them—Brazil, for example, could probably help us double the size of the company fairly quickly.
ET: Private jets are popular in South America. Have you looked at adding a private jet program like Korean Air, Lufthansa, Swiss and others have done?
Pablo Yunis: Not right now.
ET: Is it a challenge to get people to try LAN for the first time?
Pablo Yunis: That’s the main challenge. Once they fly LAN they come back. We still have very low brand awareness and are not very well known in the U.S. We are trying social media, but the U.S. is a big country and marketing in the U.S. is very expensive.
ET: Anything else you want to add?
Pablo Yunis: With our dual hubs in Lima and Santiago we have really made it easy to get anywhere you want conveniently. We are continuing to add new routes, particularly to connect business and tourist destinations. Also, our lounge in Santiago is considered one of the best lounges in the world, so we have worked hard to make sure we provide a great airport experience as well.