LATAM Airlines invests $7,870 million on fleet upgrade

LATAM Airlines plans to invest $7,870.

LATAM Airlines Group, which emerged from the merger of Chile’s LAN Airlines and Brazil’s TAM, announced that it will use $7,870 million for the expansion and improvement of its fleet between now and 2014, with the aim of strengthening operations.

The company, which plans to have 359 aircraft in the fleet from the current 319, has scheduled the acquisition of equipment for a value of $2,979 million in 2012, $2,297 million in 2013 and $2,594 million at the end of the investing process.

LATAM executives also said they intend to recover in less than a year their “investment grade credit rating”, which was stripped from LAN after its merger with TAM because of the debt it owed the Brazilian company, according to a report from Reuters.

They explained that this would be achieved from the synergies of the merger and a more restrictive dividend policy, but to move this way would be considered a capital increase during the second half of 2013.

Alejandro de la Fuente, Vice-president of Corporate Finance of the company specified that synergies captured during the first weeks of the merger have been “much better” than expected, and although he declined to give figures, he added that the company aims to “recover the level of investment grade in a couple of quarters or a year “.