LATAM reports 2Q net loss, despite improving cargo ops

LATAM Airlines Group reported yesterday an 86.6% year-over-year decline in operating income (EBIT) for the second quarter, to US$6.5 million.

While passenger and cargo revenue were both stronger during the quarter – up 3.6% and 16.8%, respectively, y-o-y – sharply higher aircraft fuel costs and passenger compensations from strikes in Chile and Brazil led to a net quarterly loss at Chile-based LATAM of $113.6 million, compared to the $138.0 million loss reported for the second quarter of 2017.

Cargo was not to blame. LATAM’s cargo revenues last quarter rose to $299.7 million, mostly thanks to a 6.7% increase in yields. LATAM Cargo also reported a 1.0 percentage point in load factor y-o-y to 54.9%.

During the quarter, the airline reported improving revenues per available tonne kilometer (ATK) on imports ex-North America and Europe into Brazil and Chile, with increasing imports of electronics and capital goods, while salmon exports from Chile indicated a recovering export market.

In terms of LATAM Airlines’ fleet plans, the airline reduced its fleet commitments for 2018 and expects to end the year with 312 aircraft, revised lower from the 1Q expectation of 318 by year-end. However, the revision will primarily be on the passenger side. In LATAM Cargo’s freighter operations, the carrier currently has a 767-300 (34628) in conversion with Boeing, and LATAM Airlines plans to put two additional 767-300s from its passenger fleet into conversion in 2019, with redelivery of one expected next year and the second pushed back to 2020.

LATAM maintained its cargo guidance for upcoming earnings.

Those interested in learning more about air freight demand drivers across Latin America are invited to join us 10-12 October at the Omni San Diego for Cargo Facts Symposium, where LATAM Cargo CEO Andres Bianchi will take part in a panel titled, “Latin American Focus: Rebounding Economies, Renewed Interest in Freighters?” For more information, or to register, visit www.cargofactssymposium.com. Discounted Early Bird registration ends on 24 August.