PAUL LEWIS / WASHINGTON DC
South American carrier wants A318s instead of A320s for low-cost subsidiary
LanChile is in talks with Airbus to swap its remaining undelivered order for A320s for the smaller A318. The Chilean airline at the same time reports making progress in liberalisation talks with neighbouring Argentina, rekindling interest in launching a local subsidiary operation there.
According to industry sources close to the airline, LanChile is negotiating an order for between 10 and 12 107-seat A318s for use by its recently launched low-cost domestic subsidiary LanExpress. The aircraft would be a direct swap for the 12 larger 156-seat A320s that await delivery out of the 25 originally ordered by LanChile.
The deal, if finalised, would boost the A318 programme, which has suffered a number of order cancellations, and potentially the Pratt & Whitney PW6000 engine as LanChile's A320s are powered by V2500s built by P&W's joint-venture International Aero Engines. Only America West remains a PW6000/A318 customer following delays in the programme.
With the PW6000 not due to enter service before 2005, an A318 order swap would also allow LanChile to hold off on new deliveries as it tries to cut costs. During its third quarter earnings call, the carrier announced the deferral of four A320s and two A340s due for delivery in 2003.
LanChile's regional director in Argentina, Francisco Vidal, has in the meantime again raised the idea of launching a local operation. LanArgentina would be modelled on LanChile's other subsidiaries in South America, such as LanPeru and Ecuadorian subsidiary LanEcuador, which was due to begin services on 15 December. LanChile is also studying the establishment of a subsidiary in the Dominican Republic.
Vidal disclosed that establishing LanArgentina might initially take the form of a partnership with one of the local carriers.
The lack of a clear governmental policy about the Argentinian air transport market has hindered Chilean efforts to establish LanArgentina in the past, but Vidal says that talks with Argentina's ministry of transport have seen significant progress.
Domestic tariff regulations are seen as one of the key obstacles that need to be addressed. Vidal says: "We need a definition of tariffs since carriers have flown for a long time at rates that are not financially viable."
Airport fees are also seen as a dissuading factor as Argentinian airport fees are among the highest in the world.
Additional reporting by Jackson Flores in Rio de Janeiro
Source: Flight International
