Chile LAN Suspends Santiago-Toronto Flights On High Oil Prices
March 25 2011 - 8:39AM
Dow Jones News
Chile's flagship carrier LAN Airlines will suspend non-stop
flights between Santiago and Toronto starting in early April
because of rising crude oil prices, a company spokeswoman said
Friday, confirming a local newspaper report.
Late last month, the company said it will increase ticket prices
for its international routes between 8% and 12% because of high oil
prices, which are trading above $100 per barrel for the first time
in two years.
Rising turmoil in the Middle East and North Africa, including
U.S. and allied military operations in Libya, have pushed crude
prices higher. Light, sweet crude for May delivery settled at
$105.60 a barrel on the New York Mercantile Exchange and Brent
crude on the ICE futures exchange settled at $115.72 a barrel
Thursday.
"Currently, rising fuel prices is an important factor to
consider," said LAN according to daily newspaper El Mercurio.
The Chilean airline added that "given the importance of the
Canadian market for our clients, LAN assures its clients that the
service [to Toronto] will remain available through affiliated
oneworld alliance airlines, connecting in New York, Miami, Los
Angeles and San Francisco."
The oneworld airline alliance includes LAN, British Airways, a
unit of International Consolidated Airlines Group SA (IAG.LN,
IAG.MC), AMR Corp.'s (AMR) American Airlines, Cathay Pacific
Airways Ltd. (0293.HK) and Qantas Airways Ltd. (QAN.AU).
A shortage of long-range aircraft also influenced LAN's decision
to suspend non-stop flights between Santiago and Toronto, El
Mercurio said. The company spokeswoman, however, declined to
comment on this.
LAN is in the process of merging with Brazilian TAM SA (TAM,
TAMM4.BR), although the Chilean antitrust court's review of the
merger will likely delay the creation of Latin America's largest
airline until at least the fourth quarter.
-By Anthony Esposito, Dow Jones Newswires; 56-2-715-8929;
anthony.esposito@dowjones.com
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