Chile's national flag carrier has started negotiating with Chinese airlines in the hope of forging alliances to improve services for passengers bound for South America. Talks have been initiated with Southern Airlines, Eastern Airlines and Air China. 'They are already flying to the United States so we are keen to organise with them future development for traffic between China and South America,' said Eugenio Gili, LanChile's Hong Kong manager. 'Their passengers to Los Angeles can link with our flights to Chile.' Mr Gili stressed the talks were still in the early stage. But LanChile is in an expansionist mode following a bumper year for profits. Only last week the carrier announced a regional code-sharing agreement and reciprocal frequent flyer programme with American Airlines. The agreements represented the 'first step' towards an even closer alliance with American, said LanChile's president, Luis Videla. Passengers at US gateway hubs as well as Chilean cities would enjoy 'improved air services' once the deal was ratified by the respective governments. 'We hope all phases of the agreement can be effectively implemented so our passengers can receive the maximum benefits as soon as possible,' he said. The agreement marks a worldwide trend among airlines to establish alliances to improve benefits to customers and reduce their own costs. Celebrating its 68th anniversary, LanChile is already the second biggest airline in South America, after Brazil's Varig, with flights to 38 cities in 16 countries and 34 weekly non-stop flights to US gateways. 'Approaching the 21st century, LanChile's strategy is continued, intensive growth to position itself as one of South America's leading domestic and international carriers,' Mr Videla said. 'The Chilean national carrier boasts extraordinary growth since it was founded in 1929 and, today, with planes averaging only 2.5 years old, has one of the most modern long-distance fleets in the world.' Following the announcement of record US$38 million profits, the carrier is now spending US$20 million on improvements.