LATAM is officially closing down its Argentinian branch, LAN Argentina, after 15 years of operations. The carrier hasn’t been flying since June 17, 2020. However, ongoing negotiations were taking place with its employees regarding a voluntary scheme of early retirement. But now, that’s also over.
LAN Argentina is gone; now what?
The unfortunate news of LAN Argentina ceasing operations is not surprising. The airline had already stopped flying last year due to the uncertainty of the Argentinian landscape.
The Argentinian government kept one of the most rigid travel restrictions globally, leaving the Argentinian airline industry struggling, with a 99% decline in passengers for half of the year. By December, it had recovered just 10% of its previous passenger traffic numbers.
In the meantime, LATAM Airlines Group filed for a Chapter 11 bankruptcy in May. The conglomerate included every airline branch it had in the process, except for two: LATAM Paraguay and LAN Argentina.
Shortly after, LATAM announced that LAN Argentina would be put on hold indefinitely. Now that’s becoming permanent. In a statement seen by Simple Flying, LAN Argentina said,
“The impact generated by the COVID-19 pandemic on the Argentinian branch, and the impossibility to create multiple necessary agreements to face the current situation led to an extremely complex scenario where it wasn’t possible to create a viable and sustainable project.”
Therefore, LAN Argentina is stopping its operations after 15 years in the country.
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What does LAN leave behind?
Before the pandemic, LAN operated 12 domestic destinations across Argentina. Moreover, it connected Buenos Aires with several cities abroad, including Sao Paulo, Santiago de Chile, and Lima.
In 2019, LAN Argentina transported 3.1 million passengers, according to the airline. Additionally, it carried over 500 tons of goods each week.
Fortunately for Argentina’s international connectivity, LAN’s exit doesn’t mean LATAM’s entire withdrawal. The airline will continue connecting with four international cities from Buenos Aires.
Currently, it is only flying to Santiago, Sao Paulo, and Lima from Buenos Aires. To Brazil, it is serving five weekly flights, to Chile, 13 weekly flights, and Lima, 14 weekly flights.
During the past few months, LAN Argentina negotiated exit deals with its employees. The airline signed 1,500 individual early retirement agreements and ended its relationship with all the Unions.
Plus, LAN Argentina has also returned its airport offices and concluded its providers’ relationships.
Therefore, LAN Argentina has only one remaining task: reimburse its customers all the domestic flights that won’t be operated.
What does this mean for Argentina?
The Argentinian aviation industry will suffer the most derived from LAN Argentina’s exit. The country was already under a semi-monopoly by Aerolíneas Argentinas. Before the pandemic, the State carrier held more than 65% of the domestic market share. Its only real competitor was LAN Argentina.
Now, LAN is gone, and the Argentinian government is pouring money into Aerolíneas to keep it afloat. Meanwhile, the low-cost carriers operating in the country, Flybondi and JetSmart, are years away from being real competitors.
The Argentinian newspaper, La Nación, summarized the issues that now the industry is facing:
“We are seeing the disastrous effects of a government that is judge and party in the air market, creating abuses and risks on private investors.”
What do you think of LAN Argentina’s exit? Let us know in the comments below.