The air cargo industry is currently undergoing a complex scenario, especially in Latin America. The economic crises in the region, added to currency devaluations and a highly competitive market, have led to airlines having to take important steps to counter this reality. To discuss the current context and how to adapt to it, the Air Cargo Club Germany invited LATAM Cargo’s Marketing & Sales VP, Álvaro Carril, to analyze the main factors and explain some of the company’s actions.
The Brazil factor
Even if several countries in Latin America are currently undergoing a crisis, the recession in Brazil — one of the continent’s most important economies — has had a negative impact on cargo volumes in the region. In response, LATAM Cargo has had to adjust its capacity, in a bid to protect its operation’s efficiency.
Efficient use of capacity, a service aligned to customers’ needs and the fulfillment of promises are key factors for LATAM Cargo”, Álvaro Carril.
The fuel duality
The drop in the price of fuel has been highly positive for the industry. However, this has led to other suppliers putting older aircraft back in service on Latin American routes, leading to a rise in capacity, which is excessive for the current market.
Added to this is LATAM Cargo’s limited ability to seek business opportunities in other markets, mainly due to its geographic location. Its main hubs are in Santiago (Chile), Sao Paulo (Brazil), Lima (Peru) and Bogotá (Colombia).
Focusing on efficiency
LATAM Airlines Group, including its cargo business, has set in motion a cost-savings plan, which includes, among other things, suspending the reception of new aircraft. In the case of LATAM Cargo, the goal is to achieve the highest possible efficiency in the use of its cargo fleet.
To counter these difficult market conditions, LATAM Cargo is focusing on the efficient use of belly capacity on passenger aircraft, using cargo aircraft according to specific demands”, Álvaro Carril.
New products
Difficulties aside, and with the permanent goal of improving service and adapting it to customers’ needs, LATAM Cargo will launch a new product portfolio for the international business during the next few months. Supported on three pillars — agility, reliability and trust —, the new portfolio will offer clear promises and consistent delivery.
Some of our competitors may be cheaper, but, in terms of reliability and service, LATAM Cargo maintains its leadership”, Álvaro Carril.
The new portfolio will allow LATAM Cargo to face current market conditions differently, by offering customers an agile, reliable and unified service throughout the network, with more robust products and integrated communication channels, thus becoming the best air cargo option to and from Latin America.
Air Cargo Club Germany
Founded in 1963, the Air Cargo Club Germany established itself as a discussion forum for the promotion of air cargo. Its 250 members are high-level industry representatives, both from Germany and from other countries.