TACA's flight plan includes continued growth

Central American airline TACA may have been playing up its 75 years of history over the past year, but its focus is on future growth. The carrier has added aircraft to its fleet, beefed up its Peruvian affiliate and changed its primary U.S. airline partner.

TACA has come a long way from its humble roots as a local carrier, founded by a New Zealander named Lowell Yerex to fly cargo into Central America.

Over the decades, the airline has gone through periods of growth and downsizing. But today, the company is definitely in growth mode.

Estuardo Ortiz, the company's commercial vice president, said that TACA wrapped up 2006 serving 3.5 million passengers, bringing total sales for the year to $800 million. Load factors range from 70% to 85%, according to Ortiz.

The company now has more than 6,000 employees and operates daily flights to 34 cities in 19 countries.

One out of five

Today's TACA was born when five Central American national carriers -- El Salvador's TACA, TACA de Honduras, Nicaragua's Aeronica, Guatemala's Aviateca and Costa Rica's Lacsa -- were integrated under one name.

"This allowed TACA to confront difficult conditions and fierce competition in the aviation industry," Ortiz said.

"We successfully survived one of the greatest crises in this sector's history: that of the September 11, 2001, terrorist attacks on the U.S. TACA even managed to expand its routes and renovate its fleet, thereby becoming one of the airlines with the newest fleets across the Americas, and to position Aeroman (the airline's maintenance and engineering division) as one of the maintenance, repair and overhaul facilities offering services to other airlines, such as JetBlue and America West."

TACA's newest division, TACA Peru, was founded in 1999 to serve the domestic Peruvian market and currently reports a load factor of 79%, said Ortiz.

"The Lima hub has had an outstanding year in 2006, and we expect to continue improving and growing," he said.

And there may be additional divisions in the future.

Ortiz was unable to confirm or deny reports that the company was considering starting up new divisions in Panama, Argentina and Chile.

But he did say that TACA "currently serves those destinations with different entities of TACA, and the intent is to continue doing so."

"Nevertheless, we are always looking for and ready to evaluate any organic or nonorganic growth opportunities within Latin America," he added.

To aid its growth positioning, TACA placed four new Airbus single-aisle A321 aircraft in service in 2006. And the carrier initiated an alliance with United Airlines in June 2006, replacing its earlier codeshare agreement with American Airlines.

The United agreement, Ortiz said, "significantly [expands] options for passengers of both airlines to international destinations not previously served as well as adding new frequent-flyer opportunities for customers of both carriers."

Growth on tap

TACA's overall growth strategy is linked to its belief that the Latin America air-travel market has yet to reach its full potential for both business and leisure traffic, according to Ortiz.

"We strongly believe that tourism will grow in the region, as more countries are investing in developing new tourist attractions and investing in international promotion," Ortiz said.

"In many Latin American countries, tourism has become the main source of foreign income and in less than 25 years has surpassed the traditional agricultural exports such as coffee, banana and others," he added.

"Business travel will grow, as well, as many Latin American countries sign commercial agreements and foreign investment continue to expand across the region."

So what would TACA's founding father think if he were alive to see today's much larger, more modern incarnation of the airline?

"I am sure that Lowell Yerex never imagined that from founding a cargo company in Honduras with one Stinson single-engine airplane, 75 years later we now see -- under the same name, TACA -- five Central American airlines consolidated into one airline, flying 3.5 million passengers with a fleet comprised of new A319, A320 and A321 aircraft, with three important hubs," said Ortiz.

To contact reporter Mark Chesnut, send e-mail [email protected].