News / Conversions will maintain LATAM Cargo capacity after sale of freighters

LATAM has sold its last two B777 freighters to Atlas Air, but their departure will not leave a gap.

The ACMI provider will deploy them through its Southern Air subsidiary for DHL. Atlas has already used one under a lease agreement with Latin America’s largest cargo carrier. The second will leave LATAM’s fleet in May.

LATAM Cargo chief executive Andres Bianchi (pictured) said the 777 had turned out not to be the optimal choice for his airline.

It was originally ordered to strengthen LAN Cargo’s capacity in the transatlantic market and to deepen the trunk routes in Latin America. However, two subsequent developments undermined its efficiency.

First, the merger of LAN with TAM brought in a lot of belly capacity and, secondly, the key Brazilian market suffered a severe recession that resulted in a dramatic decline in inbound volumes. As a result, the role of LATAM’s freighters shifted to a larger focus on feeding the belly network.

But the departure of the 777s will not entail a reduction of LATAM’s capacity, Mr Bianchi said. The airline is to take delivery of a B767 freighter in May, and it just moved to line up further maindeck capacity, signing an agreement with Boeing to convert three of LATAM’s passenger B767-300ERs into all-cargo configuration.

The first of these is expected to enter service in November, and the remaining two will follow in 2019 and 2020.

Management’s strategic review found that the 767 freighter is best suited for LATAM’s cargo business.

“The 767 is great for our core markets. It is a great plane for an eight-hour segment, and it is great for cargo that is less dense,” Mr Bianchi said.

This should work well for LATAM’s routes within Latin America and to the US. According to Mr Bianchi, it is also well suited for the carrier’s European freighter flights routed from South America over Miami to Amsterdam and Frankfurt, returning via Dakar and Viracopos to Santiago.

In lieu of three B777 flights, LATAM will operate five weekly B767 frequencies, so capacity will be roughly equal, Mr Bianchi said.

LATAM is currently using eight B767Fs, one B777F and one MD-11F, which has been leased-in for back-up and supplementary work. At its peak, the freighter fleet stood at four 777s and 12 767 cargo aircraft.

The expansion of the 767F line-up indicates that freighters continue to play a role for the airline. Mr Bianchi said a fleet of 10-12 767 freighters constituted the right mix for the carrier and if further cargo planes were needed, the parent airline had a good feedstock of conversion candidates.

He remained upbeat on market trends – the Brazilian economy had turned the corner, which had pushed up inbound volumes, he noted, adding that demand into Latin America had been going strong. He is also expecting growth in exports, noting that some perishables from the region were affected by adverse weather last year.

Meanwhile, LATAM’s belly network is growing. This year the carrier is opening routes to Lisbon, Rome, Tel Aviv and Boston.