Continued airline consolidation in Latin America strengthens aviation sector

A couple of weeks ago LATAM Airlines Group reported their first consolidated financial results, following the completion of the merger between the two biggest airlines of Latin America – LAN and TAM. While the second quarter of the year was challenging for most of the aviation industry in the region due to reduced cargo demand and the depreciation of local currencies, passenger demand in most of Latin America remained solid, allowing the new airline group to successfully hit the ground running.

Seeing these two airlines join to create one of the most powerful airlines group in the world and one of Airbus' largest customers in terms of orders, in-service aircraft and backlog, I can’t help but reminisce simpler times when LAN and TAM were still growing. You see, Airbus boosted its presence in Latin America in 1998 thanks to a joint order TAM, LAN and TACA for a total of 90 single-aisle aircraft. This was the largest contract ever signed in Latin American commercial aviation history and since then LAN and TAM combined have ordered nearly 400 A320 Family aircraft, operate more than 240 aircraft and have a joint Airbus backlog of nearly 180 aircraft.

The region has seen some extraordinary consolidations, reorganizations and acquisitions in just the last five years, making way for stronger and more efficient operations that can certainly carry the industry into continued growth and expansion beyond Latin America. From AviancaTaca, to COPA, to LATAM, some of the region’s flagship airlines now have a new face, while the region has made room for a handful of vital low-cost carriers, such as Interjet, Volaris, VivaColombia and Gol, which are transforming air travel for vast populations throughout Mexico, Colombia and Brazil.

It’s certainly a new world in Latin America today, and if you stop to blink, you may miss the next big shift.

With more than 30 years in the aviation industry, Rafael Alonso is the Executive Vice President of Airbus Customer Affairs for the Latin America and the Caribbean region, responsible for all Airbus commercial activities and customer relations in more than 40 countries.