Marshall Steele, Michelle Daigle,
Samantha Frankel, Jorge Torres,
Corey Woloschin
LAN Airlines
Introduction to Chile
• Official Name: Republic of Chile
• Declared independence on
February 12, 1818 from Spain
• Current President: Sebastián Piñera
• Founding member of the U.N.
Chile’s Economy
• Produces more than 1/3 of
the world’s copper
• In 2006, Chile became the
country with the highest
nominal GDP per capita in
Latin America
• Income inequality is very
high
• Ease of business rank is 49th
out of 183 economies
History of LAN
• Founded by Chilean Air Services
commander Arturo Merino
Benitez
• Began operations on March 5,
1929
• Merged with Ladeco in 1998
– Became Latin American Network
Airlines
• Voted in 2008 as the 3rd best
airline in the world and the best
airline in South America
International Influence
• Largest airline in Chile and operates
domestically in Peru and other Latin
American countries
• Compromised of multiple different
segments that serve different
locations.
– LAN Airlines, LAN Express, LAN Peru,
LAN Ecuador, and LAN Argentina
• Also has many international flights
to the US, Europe, and Latin
America
• Member of Oneworld (TM), the
world's leading global airline alliance
– Includes eleven of the world's biggest
and best airlines
Industry
• Regularly scheduled intercontinental flights
• Oligopoly
– many barriers to entry which inhibit new entrants
• increases industry attractiveness
– relative power of consumers
• consumers can shop on price
• gives them power
• Competition- a few large businesses that service the same area
– TAM: Brazil’s largest airline company
• Provides domestic and international travel
• Also in Oneworld Alliance
– Aerolineas Argentinas
• Out of Argentina service to South American countries
Opportunities and Challenges
• Need to comply with legislation and policies
– subject to special regulations
• Planes must meet safety regulations
– Employees must know all safety procedures
• Challenges to minimize impact on
environment– Preserving natural resources while preventing
pollution
– Reducing waste that results from their activities
Interest to Business and Engineering
• Provides engineering
and business jobs
• Very profitable industry
• Provides other
businesses with
domestic and
international
transportation
Global/National Environment
• Politics
– President Piñera owned a
large stake in LAN prior to
election
• Criticized for his delay in
selling them
• Finally sold all shares, raised
$1.5 billion
• Possible tax misconduct
• Environment
– Earthquakes can shut down
flights, affect economy
Global/National Environment (cont.)
• Economy
– Aircraft Industry due to
bounce back after rough
decade
• Terrorist attacks
• Increasing fuel prices
• More environmental
regulations
• Technology
– Inaugural Aircraft Industry
Fair this March
– Information Technology deal
with IBM
Engineering Principles
Getting The Product
•The LAN fleet is composed of Boeing and Airbus planes, which are
created at their factories.
•Materials are delivered by air, land, and sea to the manufacturing
plant where the parts are made and put together
•Include aluminum, hydraulic fluid, composites, glass, wiring,
sensors, lighting, and engine parts
•Companies like Boeing and Airbus put all these materials together
into a plane
Boeing 777s being assembled
An Airbus 318 under construction
Engineers at LAN
• Aerospace Engineers
– Design and oversee construction
of planes
• Flight Engineers
– Inspect planes, check and
operate instruments during
flight, plan and record fuel
consumption
• Mechanics
– Repair planes between flights
Safety Concerns
• Engine failure, equipment failure, cabin
depressurization
– Engineers must design structurally and
mechanically reliable planes
• Turbulence, poor weather conditions
– Engineers must compensate for flight variables
Questions for LAN
• What does the company do to mitigate
environmental concerns?
• What technological improvements are they
working towards?
• How do they benefit from the Oneworld
Alliance?
• Do you plan on expanding further
internationally?
Questions for Students
•
•
•
•
What attractions should we make sure to see?
How do you view America and its people?
What is the night life like in Chile?
What are they looking to do after they
graduate?
• What is your favorite time of year in Chile?
• Have you ever left Chile or visited America?