(Corrects Alejandro De La Fuente’s position in first paragraph.)
Alejandro De La Fuente, Chief Financial Officer of Lan Airlines SA (LAN), comments on the company’s status as the world’s safest airline stock of the last decade, according to Bloomberg’s Riskless Return Ranking, and about the takeover process for Brazil’s Tam SA. (TAMM4) He made the comments in an e-mailed response to questions.
On Lan’s reliance on cargo revenue:
“Lan’s business model has been based in complementing cargo transport with passenger transport. Cargo accounts for approximately 30 of the company’s consolidated revenue, a much higher percentage than other airlines. A third of our cargo is transported in the passenger airplanes’ bellies, which gives us a competitive advantage by maximizing the use of the plane.
“Our diversification allows us to face any of the challenges that permanently affect our industry, as any effect is limited to a part of our business and can be compensated with another part of our operation.”
About the merger with Tam:
“The merger with Tam is in line with our strategy of creating a leading airline in the region, as Tam is the largest carrier in South America and the leader in passenger transport in Brazil. With Tam, Latam Airlines will have access to the largest market in the region with important growth potential in passenger and cargo transport. The presence in Brazil will increase the group’s diversification, strengthening our business model.”
About the upcoming share swap in Tam takeover:
“We plan to begin the share swap as soon as the transaction’s registration is approved by regulators in Chile, Brazil and the U.S. The offer will be valid for approximately 30 days, during which Tam’s shareholders may exchange their shares for shares in Lan.”
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