Five months and counting: Is LATAM Cargo out of the woods?

LATAM Cargo has extended its winning streak to five months, posting a 2.3 percent increase in revenue tonne kilometers (RTKs), year-over-year, to 285 million in the month of September. But with the year-to-date average still down 1.3 percent overall, LATAM Cargo’s ledgers still carry the weight of years of regional downturn.

September also saw LATAM Cargo continuing its capacity cuts, pulling another 6.9 percent out of the system. The carrier has cut cargo capacity by 8.2 percent during 2017, so far. With passenger capacity relatively stable systemwide, it follows that LATAM Cargo is making less use of its freighters.

These cuts, along with increased RTK, translated into a 5.1 percentage-point growth in load factors – reaching 57 percent in September.

With five months of gains under its belt, LATAM Cargo’s outlook is significantly improved over last year’s. Regional freight tonne kilometers (FTKs) rose by 9.5 percent, y-o-y, in August across all carriers, prompting IATA economist David Oxley to talk about, “signs of recovery in Latin American FTK volumes.”

IATA noted that following last year’s volatility, freight volumes “now trended upwards strongly over the past six months; while they remain more than 4 percent below their 2014 peak, FTKs have risen at an annualized rate of more than 20 percent over the past six months.”