Chile LAN confirms order of 50 A320 planes

Chile’s dominant airline LAN LAN.SN (LFL.N) said on Tuesday it has ordered 50 Airbus A320 planes with a list price of around $4.15 billion as the carrier seeks to expand its operations in Latin America.

LAN plans to double its fleet with an investment of about $7.7 billion by 2018. The 50 short-haul planes would be incorporated in its fleet between 2012 and 2016 and used in regional and domestic routes in Latin America, LAN said.

LAN has placed orders for 95 A320 planes that it would get between 2010 and 2016, and might sell 15 A318 planes, a company spokeswoman told Reuters.

Shares in LAN dipped 0.44 percent after the opening, and rebounded 1.69 percent at 11,440 pesos. LAN shares have climbed more than 32 percent this year.

“My particular view is that they exaggerated a little bit. Fifty aircrafts is a lot of capacity. I’m a little bit concerned, but it’s not a major concern, because demand is doing well,” said Caio Pereira Dias, an analyst with Santander Investment in Brazil. “The main message is that the company is very confident in their domestic operations.”

LAN was one of the Latin American companies that made large commercial plane orders at the Farnborough Airshow on Tuesday. For more click on [ID:nFARN10]

The Chilean carrier, one of the region’s profitable airlines, has gained passenger traffic, rising 15.5 percent in June from a year earlier after growing 13.9 percent in May. [ID:nN08235982]

In December, LAN signed a contract to buy 30 new Airbus A320 short-haul planes worth around $1.97 billion.

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