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Alliances for better connection
For instance, the Open Skies Agreement signed last October between the United States and Chile allows more travel options and the possibility of better rates. Instantaneously, airlines have responded to this opportunity.
"The Open Skies Agreement is very favorable for Chile; it attracts more investment from the United States without restrictions and diminishes excessive protectionism from governments. For American Airlines, this has contributed to our development of alliances. Right now we have an alliance with Lanchile, which has given us an enormous access to the Latin American market and vice versa," expressed Pamela Camus, American Airlines country director in Chile. "In addition, she added, "this alliance with LanChile has contributed to the 175 percent increase in passenger traffic between the United States and Chile from 1990 to 1999.
According to Leo Mullin, president of Delta Airlines, "Delta will begin Atlanta-Santiago service in November 2000. However, preparations for the new service are already well under way. With the expansion into Chile, Delta plans to invest more than $200 million in aircraft and infrastructure. Investing in Chile is a very logical step for Delta, given the growing importance of Chile's economy to the Latin America region. Chile is the United States' fifth largest trading partner in South America, with an estimated annual trade of $6 billion in 1999. Passenger traffic between the United States and Chile has been growing at an average rate of 10 percent per year over the past five years."
With respect to the cargo aspect of transportation, LanChile has benefited from the One World Alliance with American Airlines and the Open Skies Agreement and will soon begin construction of its new cargo terminal in the Miami International Airport. For Jorge Awad, chairman of LanChile, this new hub of 43,000 square yards will make LanChile Cargo into the most important company in American region.
To further strengthen the logistics network between the United States and Chile, the U.S. Postal Services has signed an agreement with Wackenhut Courier Service to transport shipments from Santiago and other major cities in Latin America to the United States for delivery via Priority Mail.
"This is the first step in a strategy aimed at establishing a global network of third-party providers or consolidators for inbound shipments from foreign countries that will bring the Postal Service more than $100 million in new revenue over the next five years," explained James Wade, vice president of International Business of U.S. Postal Service.
"The natural partners for the USPS are the administrators of state postal services in each country. However, these can't always provide the quality of service that the USPS requires such as the ability to track and trace a package," explained Simon Salosny, Wackenhut Courier Service's sales director.
With the challenges presented by globalization and the new economy's business practices, creating alliances is much more than a good idea; it's the only way to stay competitive.
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Table of Contents New president focuses on future while reconciling the past |
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An important aspect of doing business today is transportation, not only from the standpoint of business travel but also because of the logistics entailed in transporting cargo. In addition, the growing use of electronic commerce - business to business and business to consumer - demands synergy among all the players involved in the process from the moment an order is placed to the moment it reaches its destination. Given the geographic composition of Chile, logistics and transportation pose many challenges that authorities and private sector leaders are addressing.