LATAM CEO Discusses the Vast Potential of South American Aviation

LATAM Airlines is a standout example of integration across borders in Latin America, being the largest airline group in the region. This success story began with the merger of Chile’s LAN and Brazil’s TAM in 2012, creating a truly South American airline. Such an achievement is significant in a region often challenged by economic fluctuations, geographical constraints, and regulatory hurdles, which have hindered airlines from reaching their full potential.

Despite facing challenges, such as a COVID-related Chapter 11 filing in 2020, LATAM has strengthened its market position, emerging as one of the largest airline groups globally. In 2024, LATAM served approximately 82 million passengers with a fleet of more than 340 aircraft, connecting travelers across 24 countries from its major hubs in Santiago de Chile (SCL), São Paulo (GRU), and Lima (LIM).

Under the guidance of CEO Roberto Alvo, LATAM has not just moved past its Chapter 11 bankruptcy but is also pursuing ambitious projects aimed at enhancing the airline’s significance in the region.

Recently, there have been numerous developments, including the introduction of upgraded premium cabins, orders for new long-haul aircraft, and significant investments in a new regional fleet to enhance connectivity within South America, all while pushing towards sustainability.

In a recent discussion with AeroTime, Alvo addressed the challenges and opportunities LATAM faces today.

Alvo joined LATAM in 2020 during a turbulent financial period. He shared, “At the onset of the pandemic, we sought government assistance, but unfortunately, it was not granted to us as it was in the northern hemisphere. Therefore, entering Chapter 11 became essential for envisioning a stronger future for LATAM.”

“We spent just over two years in Chapter 11,” he noted. “We successfully exited on November 3, 2022, and LATAM is now entirely recovered. This year we anticipate being around 15% larger than in 2019. We did cease domestic operations in Argentina during the pandemic, but otherwise, our presence remains quite robust.”

As of December 2025, LATAM operates in five home markets: Chile, Peru, Ecuador, Colombia, and Brazil. Although there’s a subsidiary in Paraguay, its operations focus primarily on connecting Asunción (ASU) with major hubs in Santiago (SCL), Lima (LIM), and São Paulo (GRU).

LATAM also plays a significant role in the cargo market through its subsidiaries based in Brazil (APSA LATAM Cargo) and Colombia (LANCO). Alvo pointed out that cargo services complement the airline’s core passenger transport business, which makes up about 90% of its revenue.

While the majority of Alvo’s team works from Santiago, Brazil remains LATAM’s largest market, generating roughly 45% of the airline’s revenue, followed by Chile at 20%, and Peru at 15%.

“South America has around 450 million residents, with about 220 million in Brazil, which dominates the maritime industry,” Alvo explained. “The Brazilian domestic and international market accounts for nearly half of South America’s aviation sector, which highlights its vast size.”

LATAM remains a leading airline in its other core markets.

“In Peru, we capture roughly 60% of the domestic market and around 40-50% of the international market. In Ecuador, our market share is just under 50% domestically and approximately 25% internationally,” shared Alvo. “In Colombia, we hold a smaller share—about 26% for domestic and 8% for international. Though we don’t operate domestically in Argentina, we remain its largest international operator, facilitating nearly 35 international flights daily.”

Navigating the complexities of a cross-border operation in a region lacking a unified legal framework poses numerous challenges.

“There are many open skies agreements, yet we require certification in every country, which complicates operations,” Alvo elaborated. “Unlike European conglomerates, we’ve opted to unify airlines under one brand. This decision allows us to provide a cohesive product and service standard across our network.”

“This approach makes for a more simplified operational model. Despite having various air operator certificates and subsidiaries, we function as a single airline,” he continued.

LATAM’s model is to embrace South America’s diversity while keeping a consistent brand. “Communication within the team often mixes Spanish and Portuguese, which I humorously refer to as ‘Portuñol,’ showcasing our diverse operations,” Alvo added.

What is LATAM’s market position?

According to Alvo, LATAM’s service model diverges from that of low-cost carriers prevalent in Europe and the U.S.

“The low-cost model is straightforward, with minimal amenities and a focus on upselling. While there’s space for low-cost airlines in South America, LATAM identifies as neither low-cost nor ultra-low-cost,” he clarified. “Our goal is to provide a product that caters to customer needs.”

Alvo emphasized what differentiates LATAM from its budget competitors.

“We’ve effectively defined our non-low-cost offering in markets like Chile and Peru. We prioritize smart investments over luxury,” he noted. “For instance, we may not have seat-back screens but offer a Premium Economy that provides a distinguished experience without excessive extravagance.”

“We ensure that the services offered align with what our customers are willing to pay without overextending,” he explained. “Our packages range from the basic ticket, allowing customers to customize options like flexibility, seat selection, and baggage.”

Alvo stressed the importance of reliable service. “‘Dependability’ symbolizes our commitment to operational reliability. Whenever unanticipated issues arise—be they cancellations or storms—we strive to uphold passenger dignity and ensure they feel cared for.”

“It’s about the network, the product, and our customers. The LATAM frequent flyer program is among the largest globally, with 53 million members,” he stated.

LATAM has recently launched an updated Premium Business class and a groundbreaking Premium Economy product—the first of its kind in Latin America—alongside an investment plan to retrofit its B787 fleet with state-of-the-art business class cabins.

“We’re enhancing our B787-8s and -9s in a 1-2-1 configuration for maximum comfort,” Alvo mentioned. “By the end of next year, all B787s will feature the new business cabin standard and in-flight Wi-Fi.”

Making sense of LATAM’s fleet plans

In early 2025, LATAM announced a significant acquisition of up to 74 Embraer E195 aircraft (including 24 firm orders and 50 options) to bolster regional connectivity.

“Initially, these aircraft will serve Brazil, but options may extend to other regional countries. South America boasts many cities with populations between 200,000 and 500,000, predominantly in Brazil. Analyzing the number of trips per person reveals that South America is still underdeveloped compared to Europe,” Alvo explained.

“On average, South Americans make about 0.6 trips per year, while in Europe, that figure is around three,” he noted. “Major cities are relatively well connected, but smaller towns often see minimal air travel.”

Despite the predominance of capital cities, Alvo sees immense potential in underconnected regions.

“Our new regional aircraft could expand our network by 35 cities, reinforcing our hubs,” he stated.

Regarding hub operations, Alvo detailed, “Brazil has essential hubs in Guarulhos (GRU) and Congonhas (CGH), while Lima (LIM) serves Peru and Santiago (SCL) serves Chile. Brasilia (BSB) and Fortaleza (FOR) are additional hubs in Brazil, enabling improved regional connections.”

The E195s LATAM is obtaining have comparable capacities to current A319s, with significantly better technology. “While we understand the complexities of adding new fleets, we are not straying into a different aircraft size. The E195 offers operational efficiency crucial for opening new markets,” Alvo explained.

LATAM has also placed orders for five Airbus A321XLR aircraft. “This aircraft facilitates longer routes from places like Lima or Brasilia to the United States, and we’re considering optimal applications,” Alvo noted. “We expect them to arrive in 2027.”

In October 2024, LATAM revealed plans for a fleet renewal, including an order for 10 B787 aircraft (plus five options).

“We capitalized on our Chapter 11 period to streamline our fleet, which—though robust—seemed unnecessarily complex,” Alvo commented. “We opted for the 787, finding it to be the most suitable aircraft for LATAM’s needs.”

Older B767s still operate from Lima but will likely transition to B787s as the decade progresses. “Currently, these aircraft only service specific routes, and we predict they’ll remain in operation until at least the end of the decade,” he added.

Interestingly, LATAM is unique in having exited one of the major airline alliances while standing independently. Previously part of oneworld, LATAM left in 2019 following Delta Air Lines’ investment, opting not to join SkyTeam.

“Leaving oneworld was a strategic decision influenced by our partnership with Delta. The collaboration has been successful,” stated Alvo. “While participating in an alliance remains a possibility, it is not our immediate focus.”

“We maintain a network of bilateral agreements with key partners in our markets,” he elaborated, referring to existing collaborations with Iberia, Qantas, and Lufthansa.

Moreover, the partnership with Qatar Airways continues to thrive. “Though Qatar holds a 10% stake in LATAM, our relationship remains commercial rather than joint venture-centric,” Alvo explained.

What are LATAM’s future growth vectors?

“The South American aviation market still has immense potential. We’re currently experiencing trip rates akin to those seen in Europe or the U.S. in the 1980s,” Alvo pointed out. “Growth opportunities exist to connect South America internally and globally.”

“According to industry reports, Latin America consistently ranks highly in terms of growth potential, following Asia,” he added. “We anticipate substantial development within the industry over the coming decades. LATAM’s roots are in South America, where we are dedicated to enhancing operations.”

To illustrate, Alvo remarked, “Chile has the most developed domestic market in South America, yet the busiest route is Santiago to São Paulo, showcasing our central hubs. With regional aircraft, we foresee significant growth in linking regions.”

The new fleet will play a vital role in leveraging these opportunities.

“We are equipped with widebody aircraft for network expansion, and the XLR will enable us to explore smaller markets in Europe and the U.S. Furthermore, our regional aircraft will bring balance to the network,” Alvo explained. “We have nearly 100 aircraft expected to arrive by the end of this decade.”

Alvo summarized the roles played by LATAM’s hubs. “Guarulhos connects South America with Europe and parts of the eastern U.S.; Lima acts as a connector to the Caribbean and western U.S.; Santiago serves as the gateway to the South Pacific.”

On sustainability

Sustainability is a top priority for Alvo. Recently, LATAM achieved a 10% reduction in carbon intensity measured in grams of CO2 equivalent per revenue passenger kilometer (gCO2e/RPK). The airline is also pursuing the development of Sustainable Aviation Fuel (SAF) in South America, a region currently behind others in this initiative.

“In contrast to Europe and the U.S., we lack public policies related to SAF adoption,” Alvo explained. “The European mandate model may not be suitable for our region, where economic constraints complicate the willingness to mandate SAF.”

“Our challenge lies in balancing economic development with environmental responsibility,” he continued.

Despite setbacks, LATAM remains committed to its sustainability initiatives. “In 2021, we set a goal to achieve 5% SAF usage by the decade’s end. This was more of a signal of intent than a firm commitment given the absence of SAF production at that time. We aimed to prioritize local SAF production to stimulate industry growth; however, to date, no such production exists,” Alvo stated.

He also added other sustainability efforts. “We prefer not to rely solely on carbon offsets, as that might not equate to actual reductions. Instead, we engage with local projects in Colombia that enhance conservation while ensuring certification of our contributions.”

In addition, LATAM aims to eliminate single-use plastics in operations and reduce landfill waste by 75% by 2027, continuing to seek ways to contribute positively to the environment.

With the U.S. as a primary market, LATAM has noticed some impacts from strict border policies.

“Our operations from the Southern Cone are less affected compared to regions like Central America or Mexico since migration flows are lower,” Alvo observed. “The most noticeable impact has been a drop in demand from Chile to the U.S. However, the current U.S.-Chile visa agreement still stands.”

Addressing LATAM’s cargo operations

LATAM ranks as a significant cargo operator not only regionally but also on a global scale.

“South America accounts for about 6% of global cargo traffic, with Brazil and Argentina serving as major importing nations while Pacific coast nations like Chile, Peru, Colombia, and Ecuador primarily export,” Alvo elaborated.

He noted, “The cargo sector is increasingly influenced by cross-border e-commerce. Companies from China, including Shein, are emerging rapidly. This segment is the fastest-growing, though it continues to be relatively small overall.”

Alvo expressed confidence regarding potential disruptions from a possible trade war between the U.S. and China, stating, “Our cargo flow is less affected by U.S.-China relations since most products come through Europe rather than the U.S. despite any customs complications.”

Looking ahead

To conclude, Alvo projected a promising future for LATAM over the next decade.

“I foresee significant growth potential, with the industry possibly expanding by 5-6% annually in traffic within the next three to five years,” he stated. “Regulatory hurdles may persist, yet the region’s growing openness leads to fewer obstacles.”

“The biggest challenge lies in growing the business while simultaneously advancing our emissions reduction strategy. South America is remarkably vast, presenting a complex balance between connectivity and environmental considerations,” he said. “Air transport is vital for many communities across the region, impacting cities like Manaus.”

As LATAM aims to lead sustainable practices, Alvo emphasizes the importance of fostering environmentally responsible growth. What are your thoughts on LATAM’s journey toward achieving these ambitious goals?