A few more days to go and 2018 is over. Given the many political uncertainties (Venezuela, Brazil) and market contractions (Brazil, Argentina) we thought it might be the right time to
deliver an overview over LATAM Cargo, South America’s largest freight carrier, latest development, performance, and initiatives. Surprisingly, the many external hiccups, including Trump’s Latino
phobia influenced the freight carrier’s business only marginally, confirms CEO Andrés Bianchi from his office in Miami, Florida.
Instead, the airline resolutely maintains its masterplan for further growth, taking one step after another, illustrated in this interview held with the executive shortly before Christmas Eve. A decisive digital tool for taking the next step will be the
Cargo Management System CROAMIS, ready for usage starting in late 2019, announces the manager.
Mr Bianchi, joint teams of your airline and provider Wipro are currently implementing CROAMIS. What is the status of this project and when will your end-to-end system platform be fully
The project is going well. We have finished the first phase roughly on schedule and we continue to expect the cutover for international operations to occur late in 2019 and in 2020 for domestics transports.
Why did you decide in favor of CROAMIS? There are other Cargo Management Systems available, such as IBS, CHAMP or Hermes Logistics Technologies, for instance. Did your stakeholder and CROAMIS user Qatar Cargo influence your decision?
I think it is important to note that Qatar did not influence our decision in any way. We chose CROAMIS because we believe that the combination of the original system plus the improvements tailored to our specific needs provides us with the best platform to support our current and future operations.
We are convinced that CROAMIS provides us with the best E2E solutions, particularly customer experience, operational efficiency and risk management. Among the variables driving our choice I’d highlight four: Firstly, it is a real end-to-end solution that with a rather limited set of customizations will satisfy all our requirements. Secondly, the system's core technology is relatively modern and will allow it to evolve efficiently and rapidly in the future. Thirdly, as a cloud-based solution it is easily scalable, which is relevant given the growth in the number of shipments we are seeing (especially in domestic markets). Last, but not least, it will allow us to integrate our domestic and international networks - which currently operate using various, separate systems - into a single platform in a short period of time.
Sounds like you expect CROAMIS to become a real game changer for LATAM Cargo.
This statement I am not going to object. We are convinced that the CMS’s blessings will be twofold: From a clients’ perspective, moving into CROAMIS and replacing our older systems will result in several benefits. For instance, it will lead to better tracking, new and improved e-tools (eAWB, ebooking, etc.) and better access from mobile devices. In addition, it will enable us to provide a more homogeneous experience across all markets we serve.
From an internal perspective, CROAMIS will replace more than a dozen systems, some of which are quite outdated. Such an architecture is a heavy burden: it requires a lot of maintenance, it is hard to chat due to missing system integration, and, in some cases, it generates a heavy workload for our staff. Switching into a single, end-to-end system significantly reduces that burden and should result in efficiency improvements as well as higher reliability.
You just received your first Boeing (BCF) converted B767-300ER, with two more following by 2020, making it twelve B767Fs altogether. Will this be the end of the LATAM freighter
During 2018 we completed our return to a single fleet of Boeing 767Fs with the phase out of our B777Fs. We did so because we believe the B767Fs match our network profile much better than the B777Fs. Because of that, we leveraged our passenger fleet - we are lucky to have over 30 B767 that are excellent feedstock for conversion - to expand our freighter operations and may continue to do so in the future.
Shortly ago, you opened the route Bogota – Huntsville, with Panalpina being the driving force for these perishable shuttle flights. Any other new destinations standing on your 2019 schedule?
We are committed to continuously improve our network so that we can provide our customers with better and more valuable solutions. During 2018 we added freighter routes such as Madrid-Sao Paulo, Brussels-Montevideo and Bogota-Huntsville and passenger routes, such those from Sao Paulo to Boston, Rome, Lisbon and Tel Aviv. During 2019 we plan to continue doing so. We have already announced a new passenger service between Sao Paulo and Munich. We are also finalizing plans to launch some new freighter routes that we expect to announce soon.
When looking back, where does LATAM Cargo stand at the end of December 2018 compared to December 2017?
We are happy with our overall performance during 2018. While we faced a challenging demand environment in the second half of the year due to economic volatility in Brazil and Argentina, and higher fuel prices, we hit our financial targets. At the same time, improvements in our operating performance led to a dramatic increase in our customer satisfaction metrics. Finally, we made significant headway on key initiatives - which encompass IT, fleet, network and infrastructure - that will support our growth going forwards.
Which were the highlights in 2018, where did LATAM Cargo underperform?
On the positive side I’d highlight our ability to respond to stronger export flows and the overall improvement of our service metrics. On the negative side, the decline in imports into South America was an issue, as well as 2-3 weeks of very poor operational execution due to issues with the third-party aircraft we had contracted to support our operation.
And last but not least, where will LATAM Cargo be in one year, at the end of December 2019?
2019 should be a special year for us. We have several initiatives that should start to bear fruit in 2019. Given that these projects include improvements in topics ranging from network, fleet, alliances, infrastructure and IT we are confident that when they are done, we should have consolidated ourselves as the leading cargo airline in Latin America.
Good fortune for the forthcoming projects and many thanks for the explanations given.
Interview: Heiner Siegmund