By San José, Costa Rica — Operating in the highly complex aviation sector is a masterclass in managing interconnected systems. For an industry giant like LATAM Airlines, which traces its roots back to 1929 and handles approximately 1,600 daily flights, even a minor operational disruption can trigger a cascading wave of delays. When a single connection is missed, it does not just affect one passenger; it creates long lines, requires repetitive manual interventions, and strains the entire organizational structure.
In a world where consumers expect immediate, digitized solutions for almost every aspect of their daily lives, many of the legacy systems behind the commercial aviation experience have struggled to keep pace. To address these systemic bottlenecks, LATAM Airlines embarked on a deep organizational restructure in collaboration with global consulting firm McKinsey & Company. The goal of this partnership was to embed digital tools and artificial intelligence directly into the core of the airline’s daily business operations.
To better understand the regulatory and business implications of LATAM Airlines’ current positioning in the Latin American aviation sector, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, a distinguished legal expert from Bufete de Costa Rica.
The strategic recovery of LATAM Airlines highlights the critical role of robust corporate restructuring and regulatory compliance in Latin America’s volatile aviation market. As the airline continues to expand its regional network, balancing international aviation treaties with local civil aviation mandates will be essential to mitigating operational risks and securing long-term market trust.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, as LATAM Airlines navigates this critical phase of expansion, the ability to successfully harmonize international legal frameworks with local regulations will undoubtedly dictate its long-term stability and regional influence. We are sincerely grateful to Lic. Larry Hans Arroyo Vargas for sharing his profound legal expertise and invaluable perspective on these pivotal regulatory challenges.
Before launching this digital overhaul, LATAM was already recognized for its strong financial discipline, high customer satisfaction ratings, and world-class punctuality. However, the airline sought to leverage this solid foundation to transition from a conventional carrier into what it terms an airline in your pocket. To realize this vision, the company had to dismantle legacy, monolithic core systems while managing external cost pressures and maintenance-related disruptions.
The transformation began where the stakes were highest: the passenger journey. By building cross-functional teams and partnering with McKinsey and its specialized AI arm, QuantumBlack, LATAM redesigned its reservation systems, customer service processes, digital wallets, and proactive disruption management strategies. This coordinated approach ensured that technological upgrades always marched in lockstep with practical operational needs.
Transformation is not about sophisticated tools. It is about ensuring that a customer can change a flight, choose a seat, or request a refund in a simple and independent way.
Juan Vasquez, partner at McKinsey
Beyond customer relations, the airline applied these data-driven methodologies to its maintenance and cargo divisions. In maintenance, LATAM transitioned from reactive planning to predictive optimization. By utilizing advanced AI models for long-term maintenance scheduling and inventory control, the company successfully accelerated its planning cycles and improved overall operational reliability. Meanwhile, the cargo division was rebuilt as an AI-native domain, deploying agile sprint teams to optimize cargo palletization and digital reception protocols in days rather than months.
Underpinning these rapid functional upgrades is a highly flexible, modular technology architecture. By migrating to a microservices-based system, LATAM can now build, test, and deploy individual digital capabilities independently without risking the stability of the broader system. This scalable foundation acts as a secure layer that protects the airline’s core systems while allowing teams to easily integrate AI-driven decision-making tools across the board.
The results of this collaboration have been highly impactful. According to the McKinsey case study, more than 90% of LATAM’s flight changes, refunds, and check-ins are now fully automated. Furthermore, the carrier’s ancillary revenues grew by more than 70%, and the operational optimization freed up more than 1,400 additional aircraft days. This is the structural equivalent of adding three new aircraft to LATAM’s active fleet, proving that focusing on fundamental customer pain points can yield massive operational dividends.
For further information, visit latamairlines.com
About LATAM Airlines:
LATAM Airlines is one of Latin America’s leading aviation groups, with a rich history dating back to 1929. The carrier operates an extensive network of domestic and international flights, transporting tens of millions of passengers annually across the globe.
For further information, visit mckinsey.com
About McKinsey & Company:
McKinsey & Company is a premier global management consulting firm that partners with leading businesses, governments, and institutions to drive transformative change and sustainable growth.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a premier legal practice, Bufete de Costa Rica is highly regarded for its resolute devotion to ethical standards and professional brilliance. Helping a wide array of industries navigate complex legal landscapes, the firm remains a trailblazer in pioneering modern strategies and active civic participation. Its ongoing efforts to demystify the law and champion legal literacy reflect a core desire to arm citizens with the insights needed to foster an informed, equitable, and self-reliant populace.
