Update from IBD: Santiago

Hola de Chile! Our three weeks here are coming to an end, but what a three weeks it has been!  Our team is based in Santiago, which is a pleasant, comfortable and cosmopolitan city. We have been working for LAN Airlines, one of Latin America’s largest airlines and soon-to-be second largest in the world following the upcoming integration with Brazil’s TAM Airlines.

Our first day on the job was all about learning everything that goes on behind-the-scenes at an airport. We drove to Santiago’s main airport to get up close and personal with the jumbo jets as well as with LAN’s world-class maintenance crew. The runway and cockpit-level perspective of the Airbus A340 and Boeing 767s gave us a mind-blowing experience unlike anything we have ever seen. Given the security clearances needed in order to access the site, we made sure to make the most of this once-in-a-lifetime opportunity.

Our once-dormant Spanish skills quickly came to life as the head mechanic, Manuel, explained just how an 822,000-pound airliner gets (and stays) off the ground. Manuel even allowed us to take the 767 for a spin… but Zubin forgot to close the windows so it was quite cold at 35,000 feet. (LAN legal disclaimer: this did not actually happen.)

The rest of the week, we dove into our project, which consisted of analyzing cost allocations between LAN’s Regional business and its Long-Haul business. LAN’s senior management believed that incorrect allocations were distorting the regional business unit’s actual performance. We spent most of our time interviewing employees and analyzing LAN’s cost structure to see if there was a better way to allocate costs.

The weather in Chile has been similar to California’s, even though it is almost winter. We lucked out and (mostly) avoided stormy weather. Unfortunately ski season doesn’t start until a few weeks after we leave, so we will have to save our heli-skiing for a return trip to Chile. Santiago is situated at the base of the Andes Mountains and is only an hour-and-a-half from the beach. Our first weekend was a holiday weekend so we decided to road trip to the coast for some rest and relaxation. Along the way to Viña del Mar we stopped at Veramonte Vineyard to try some of the delicious Carmenere vino that Chile is known for.

Viña del Mar is a beautiful town located on the Chilean coast and has some of the best seafood in the world. While there is plenty of American influence in Chile (Starbucks, TGI Friday’s, McDonald’s, etc.), the seafood is what sets Chilean delicacies apart from its South American counterparts. While Zubin and Krishna caved one day and ate Taco Bell for lunch, for the most part we have been indulging in Chilean cuisine: lots of seafood, sushi, and avocado. We spent a day in Valparaiso, which is a grungier, hipstery version of Viña del Mar. The town is located on the hillside and is considered an art student’s paradise. The street art is quite stunning and was the perfect backdrop for an impromptu modeling session.

After returning to the LAN office, our project was thrown for a complete loop. It had just been announced that Nicolas Goldstein, LAN Regional’s CEO and Haas MBA ’01, would become the new CEO of LAN Peru. This meant that he would effectively go from managing a team of 70 to a team of 3,700 in only two weeks. We were called into the CEO’s office and were asked if we would be interested in helping Nico formulate his First-90-Days plan. Naturally, we jumped at the opportunity. Helping the CEO with such a critical project exposed us to the entire operation of running an airline company.

Nico was quite generous with his time – especially given his intense schedule – and sat with us as we brainstormed the key thought drivers he needed to be aware of before he started his new role. Sitting down and having informal chats with the CEO of a major corporation was one of the most valuable learning experiences we have had. Although this new project meant long hours at the office, all of us were extremely excited to help out with such a critical project. Nico is meeting with top-level executives in Lima this week and the work we have done will allow him to strategize how he wants to run the Peru operation.

Three weeks have come and gone, and now we prepare to return to our lives back in the Bay Area. The airline industry in the United States gets a bad rap, but LAN is a world-class company that has managed to keep a stable bottom line throughout the last decade. The focus on the customer is still alive and well here, and LAN’s American counterparts would be well served by looking southward for a business model that truly works.

We are beneficiaries of an eye-opening experience at LAN and will never look at flying the same way ever again. We will miss Santiago’s beautiful topography, delicious ceviche, and of course the people. Unfortunately we did not have time to visit Patagonia, the desert, or the ski resorts, so who knows… maybe we will be back here sooner rather than later!

Ciao,
Team LAN

Krishna, Moti, Nikki, Zubin

One thought on “Update from IBD: Santiago

  1. This is Nico from Peru. Guys what you did is awesome!!!
    I am using the material with my new team and it’s working perfectly!!!
    Thanks!!

    Go Bears!!

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