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Merged airline giant to fly South America's first Dreamliner

By Claire Brennan, for CNN
updated 5:22 AM EDT, Tue October 16, 2012
STORY HIGHLIGHTS
  • South America's first Dreamliner to start flights within two months
  • LAN and TAM will continue to operate as separate brands despite merger
  • CEO says Latin Americans 'aren't scared' of economic downturn

(CNN) -- It's been a big year for Chile's airline industry. In June, the country's flag carrier LAN completed its takeover of Brazil's biggest airline TAM.

In recent weeks the aptly named merged group, LATAM, has welcomed the continent's first ever Dreamliner 787 to its runways. Another one is due to touchdown before the end of 2012 - and a further 30 will arrive within the next ten years.

The $4.9 billion order represents one of the largest investments in LAN's history. LATAM's CEO Damien Scokin says it will make a big difference to the firm's growth strategy and hopes to get commercial flights running as soon as possible.

"The 787 is going to start flying as of two weeks from now to Buenos Aires, just to train pilots," he told CNN's Richard Quest.

"Once they are trained they will start flying to Los Angeles and after that initial phase of two months, there will be aircraft for Europe. They will fly Santiago, Madrid, Frankfurt."

Despite the formation of the LATAM airlines group, LAN and TAM will continue to operate as separate entities for the time being.

We are Latin Americans. We lived with ups and downs for years, so this is far from scary for us
Damien Scokin, CEO of LATAM

The new Dreamliners will fly under the LAN branding, as its parent group is keen to capitalize on the weight of the individual brands in their respective regional markets.

"When you integrate companies which are as big as LAN and TAM, there are so many opportunities and so much money in terms of pursuing things. You have to have a very clear head in term of what not to do.

"We don't see right now a value to the customer in integrating the brands - we have two wonderful brands. TAM is highly valued in Brazil and abroad and LAN is a household name in Latin America. It's a wonderful problem to have."

Read: Brazilian officials approve airline giants' merger

Despite the global downturn, LATAM's main goal is growth through its existing route network domestically, regionally and internationally.

Mr Scokin added: "In the last few years our planes are filled much more on the Latin American end than on the developed markets end. We are feeling that slow down of the economy.

"But we are Latin Americans. We lived with ups and downs for years, so this is far from scary for us."

With a significant number of Dreamliners already ordered, there are obviously no plans by LATAM to take it one plane at a time. And Mr Scokin has spoken of his hopes to buy even more of the aircraft, thanks to an increased balanced sheet provided by the recent merger.

"Our financial strengths will be increased by having a larger operation," he said.

"We will be able to buy more of these planes in very good financial conditions, which have also been traditional advantages of these companies.

The new dreamliner will operate under Chile\'s LAN brand, despite the merger with TAM
The new dreamliner will operate under Chile's LAN brand, despite the merger with TAM

"As I said we increase our ability to fly to more places because of traffic rights, so there is a bunch of opportunities that open for us as a result of the integration."

A key decision that hasn't been made since June's merger, is which air alliance LATAM will be joining. There are two options to choose from, TAM's current deal with Star Alliance -- or, more likely, LAM's agreement with One World.

Mr Scokin says he won't be pushed on giving an answer and no concrete decision has yet been made.

"We are not sure yet. For a company like LATAM, with such a leadership in the region, remaining unaligned is definitely an option," he added.

"We will give you a call right after we make the choice."

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