Latam Airlines will substantially increase cargo capacity from Europe to the U.S. and South America with extra freighter flights and routes in the second half of the year, the Santiago, Chile-based airline group announced Tuesday. The aircraft deployment is expected to facilitate the transport of pharmaceuticals, vehicle spare parts, perishable fruits, seafood and other commodities.
Latam Cargo, which currently operates 14 Boeing 767 all-cargo jets, said weekly frequencies will nearly double from seven to 13. Prior to the pandemic, Latam operated about five flights per week to Europe. The company will also open three new freighter routes from Amsterdam that will operate twice per week.
The first new route from Amsterdam to Sao Paulo, Brazil via New York or Miami launched in June.
New additions to the freighter fleet, as well as new digital booking options such as WebCargo, have enabled the European network expansion, which will be phased in over the coming months, LATAM officials said.
Latam’s decision provides shippers more consistent airlift choices and could further lower freight rates as the market absorbs an influx of capacity this summer. After lagging other regions for the balance of the pandemic, air cargo demand in Latin America has outperformed much of this year as governments relaxed COVID restrictions and airlines reintroduced suspended passenger services. Latin American carriers in May reported a 13.8% increase in cargo volumes. Cargo throughput year to date is up 22%, supported by a one-third hike in passenger belly and freighter capacity, while every region except Africa has experienced negative growth compared to last year, according to the International Air Transport Association.
Latin America accounts for only 2.2% of the global market share in cargo volumes.
The North Atlantic trade corridor has experienced a significant influx of cargo capacity as passenger airlines reintroduce long-haul, widebody services for the busy summer season. The additional supply has deflated shipping rates and led some freighter operators to move all-cargo aircraft to other regions, such as Asia, where rates are holding up more. The Latam assets will make up for some of those freighter defections and benefit cargo owners that want the schedule certainty or extra space available with a dedicated cargo jet.
Airlines in Latin America have shown confidence that the cargo business will continue to grow by introducing new services and investing in additional cargo aircraft.
Latam Cargo is in the process of sending up to 10 of the company’s 767 passenger jets to Boeing for conversion into main-deck freighters. It expects to add two more aircraft to the fleet, for a total of 16, by the end of the year. The company is scheduled to receive a factory-built 767 freighter from Boeing in September. If all options are exercised, Latam Cargo could have a fleet of 22 medium widebody freighters by the end of 2023.
The new freighter routes being introduced by LATAM are:
- Amsterdam-New York (JFK)/Miami-Bogota, Colombia
- Amsterdam-New York/Miami-Sao Paulo-Bogota
- Amsterdam-Madrid-New York/Miami-Bogota
The flights will alternate stops between New York and Miami. Connectivity to other cities is available from New York on Latam’s passenger network and at its Miami cargo hub via cargo and passenger services. Latam said it will increase its service between Sao Paulo and Miami to nine times per week to ensure there is adequate capacity to handle the European traffic.
A U.S. bankruptcy court last month approved Latam’s restructuring plan, opening the door to the company’s exit from the bankruptcy process later this year. Once certain financial and securities requirements are fulfilled, the plan will pump $8 billion into the company, including $5.4 billion in financing from major shareholders Delta Air Lines (NYSE: DAL), Qatar Airways and Grupo Cueto.
Latam in May began operating a weekly cargo flight from Huntsville, Alabama, to Sao Paulo on a lease to logistics service provider DSV.
Click here for more FreightWaves/American Shipper stories by Eric Kulisch.
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