LATAM Airlines recently announced new 787-9 service from Lima to London Heathrow, beginning December 2023. The long-haul service (6,300 miles) got us thinking: Didn’t LATAM already operate this route?

To our surprise, no. In fact, no airline currently connects the two culinary capitals, separated by a measly 6,300 miles. A long, thin route tailor-made for the Rolls-Royce Trent-powered 787-9, the market's history is one of seasonality and one written almost entirely by British Airways.

Sporting no direct service prior to 2016, the path to London likely ended in LHR. Slightly more than 100 people per day traveled between the two cities, more counting connections beyond LHR or LIM.

Identified by British Airways in 2016 as a seasonal leisure-ish market, a nonstop flight was added to nearby London Gatwick Airport - a compromise between the promotion of direct service and the relegation of Gatwick.

To make a long story short, BA restarted the market in late 2021, only to leave entirely by 2022 (BA never restarted service after the pandemic; however, schedules exist for flights that didn’t fly. As a result, the 2021 spike in passengers is also ephemeral). For LATAM, the recently-vacated 120-passenger daily local market was a spicy option that became a reality with the availability of a slot at the busy London LHR airport.

Yet, this new market is not without its challenges. Even as it holds 120 daily passenger local potential, it has historically come during the peak travel season. Valleys are deep, resting at closer to 60 daily passengers, meaning LATAM will need to find some people to allow the 303-seat 787-9 to make economic sense at $400 per ticket.

LATAM has launched the service 5x weekly (skipping Thursday and Saturday evening eastbound departures), rolling the current 60 daily local passengers into fewer days yet still averaging only 84 daily. Based on a peak season of nearly 120 passengers daily, five weekly flights could move as many as 168 per flight. This leaves 135 seats to fill with connections, either in Peru or beyond London.

British Airways took clear advantage of the UK traveler to fill flights from Gatwick; however, this has also skewed the point-of-sale balance in favor of the UK. The added obstacle for LATAM is that over two-thirds of the Lima to London market has historically been filled with UK passengers. With point-of-sale exceeding 67% from the UK, LATAM will have the challenge of attracting the once-BA traveler into the hometown 787-9.

Further increasing the challenges for LATAM is that pesky clock. At 6,300 miles, London is too far to turn an aircraft on itself, requiring two 787-9s to operate the route. With evening departures in both directions, the two 787-9s will literally pass each other in the night, further complicating the economics of moving 240 passengers a day, requiring two of the Peruvian airline’s eight flagships, 25% of the 787-9 fleet.

This math comes with another challenge - competition. Several airlines compete today for the Lima to London passenger, moving not-insignificant quantities through their own hubs.

Top of the list is nearby competitor Avianca, moving over half of today’s market through Bogota. Yet, close on the heels of Avianca is KLM, offering direct service to Amsterdam. Notable with this service is the geographic nuisance that Amsterdam is beyond London, likely giving Lima passengers a frustrating glimpse of their destination as they begin their descent into AMS.

LATAM’s own service of the London market does not appear on the list until number six, moving eight daily London passengers on the daily service to Madrid.

Yet, it is LATAM’s own position down the list that likely makes the market so attractive. Once capable of sustaining seasonal service to London’s “other” airport, the market does exist, if latent in potential. The new market will cannibalize very little from LATAM’s current transatlantic service, instead taking primarily from top competitor Avianca.

Further, LATAM’s recent exit from the Oneworld alliance into the joint venture with Delta Air Lines has not included entry into the Skyteam alliance. This limits the deterrence from KLM and Air France, two Skyteam airlines moving a combined 40 passengers through their respective hubs.

But for LATAM, the benefit of such a market comes from Lima itself. In the competitive game of international travel, LATAM has placed its flag at the heart of Peru’s capital. Beyond the benefit to LATAM the airline, is the benefit to LATAM the region. Connecting the third-largest city in Latin America to Europe’s travel hub will now be accomplished by a Latin American airline.

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