LATAM Airlines open to exclusive e-commerce partnership to boost cargo unit

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A LATAM Airlines plane carrying a shipment of the Sinovac coronavirus disease (COVID-19) vaccine arrives at Carrasco Airport in Montevideo, Uruguay February 25, 2021. REUTERS/Mariana Greif

SANTIAGO, March 26 (Reuters) - Chile’s LATAM Airlines (LTM.SN) is open to signing an exclusive contract with an e-commerce operator in Latin America as it looks to boost its cargo unit due to persistently weak passenger demand resulting from the coronavirus pandemic, an executive told Reuters.

E-commerce has grown substantially in Latin America during the pandemic although it has historically lagged due to poor infrastructure. Argentina's Mercadolibre Inc (MELI.O) dominates in the region, especially in Brazil, and has a small fleet of in-house planes. Inc (AMZN.O) has also been making inroads in Latin America.

While signing an exclusive cargo contract is a possibility, Andres Bianchi, the chief executive of LATAM's cargo division, said the company may also create a system "where different players who want to participate in e-commerce have access to capacity and use our network."

"We are seeing e-commerce as a trend in the region that will continue growing, not just domestically but increasingly internationally," Bianchi said.

LATAM, the largest carrier in the region, filed for bankruptcy protection last May, hurt by the sudden collapse in air travel caused by the pandemic.

Since then, its cargo division has recovered faster than the rest of the company, and the company is now looking to permanently convert eight of its passenger planes into cargo aircraft.

Bianchi is particularly interested in increasing cargo capacity to Brazil, he said. But he's also working to increase cargo flights from Ecuador and Colombia, which have strong flower exports.

“That’s why we are going to add two (cargo) planes in Colombia, as well as supporting the growth of the salmon industry in Chile,” he said, pointing especially to Asian markets.

Reporting by Fabian Cambero in Santiago

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