Beleaguered LATAM Cargo posts disappointing May numbers

LATAM Cargo’s May airfreight numbers reveal more disappointing news for the struggling South American carrier. Revenue tonne kilometers (RTKs) were down 11.9 percent, year-over-year, from 303 million in May 2015 to 267 million last month.

Available tonne kilometers (ATKs) fell 6.7 percent, y-o-y, from 591 million in May 2015 to 552 million in 2016, but the reduction in the carrier’s capacity was not enough to improve LATAM’s cargo load factor for May 2016, which slipped 2.9 percentage points to 48.5 percent.

With the Brazilian economy on the fritz and tough competition from rival Avianca and a number of U.S. based carriers, LATAM has struggled to downsize to profitability. Their success rate is reflected in the poor numbers posted this week, as shippers move cargo to other carriers with more convenient schedules or lower costs. Meanwhile, in Brazil, stringent labor regulations make it hard for the beleaguered carrier to eliminate redundant positions.

On the passenger side, customers boarded fell from 5.34 million in May 2015 to 5.27 the following year. However, system passenger traffic did increase by 1.2 percent, y-o-y, while capacity increased by 0.3 percent. LATAM’s passenger load factor for the month increased by 0.7 points to 83.1 percent. International passenger traffic accounted for 57 percent of May’s total passenger traffic.