LATAM Airlines Group opens exclusive e-commerce cargo partnership

LATAM Airlines Group opens exclusive e-commerce cargo partnership

Recently, Reuters reported that Latin America's largest airline group LATAM said it is open to "signing an exclusive contract with an e-commerce operator" as it hopes to strengthen its cargo demand in the future .

Over the past year , the COVID-19 pandemic has continued to plague the aviation industry, with passenger performance shrinking sharply. Aviation companies have been forced to seek new economic growth , and a turning point has emerged in the cargo sector .

Air cargo demand has remained resilient throughout 2020 as the pandemic forced people to stay at home and boosted online shopping . Latin America is no exception , said Alexis Serrano, CEO of Latin America’s air cargo division.   Andrés Bianchi discussed the possibility of developing a freighter operating model , saying: " In this model, different players in e-commerce would have the opportunity to use our air transport network . "  

In November 2020 , e-commerce platform MercadoLibre leased four planes from different airlines to deliver its packages across Brazil.

Azul Airlines converted a small number of its Embraer 195 passenger aircraft into freighters in 2020 ( although they cannot be configured as full freighters as the full freighter version of the aircraft has not yet been certified ), mainly for use by its e-commerce customers.

No matter which option LATAM Airlines Group chooses, it will benefit from its large and complete transportation network in Latin America . Although the group is headquartered in Santiago, Chile, it also has complete subsidiaries in Brazil, Colombia, Ecuador, Paraguay and Peru, serving most countries in Latin America . Reuters said that according to Bianchi, LATAM will focus on increasing capacity in Brazil, Ecuador and Colombia in the future .

While LATAM Airlines Group ’s passenger revenues continue to struggle, the group’s cargo revenues have soared over the past year. LATAM Airlines Group ’s cargo revenues increased 26.7% to $354.8 million in the fourth quarter of 2020 compared to the fourth quarter of 2019. Cargo yields soared 40.8% despite a 10% decrease in volumes compared to the same period in 2019.

This suggests that LATAM Airlines Group may have a bottleneck in the relationship between supply and demand in terms of cargo transportation . The airline group announced in early March that it would convert its four 767-300 aircraft into full freighters by 2022, most likely to solve this problem.

According to LATAM Airlines, a further four aircraft are expected to be converted to full freighter configuration between 2022 and 2023, resulting in an 80% increase in LATAM Group’s cargo capacity over the next 30 months, bringing the group’s dedicated freighter fleet to 19 aircraft.

With the increase of LATAM's air cargo capacity, logistics and transportation in Latin America will be more secure, which will further promote the development of local e-commerce.

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