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LATAM Airlines Group posts Q2 net loss of $92 million

Staff Writer |
LATAM Airlines Group reported a $92.1 million net loss for the 2016 second quarter, deepened from the group’s $49.7 million net loss in 2Q 2015.

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Revenues for the South American airline group — which comprises LATAM Airlines and its affiliates in Peru, Argentina, Colombia and Ecuador, LATAM Cargo, TAM S.A. and its affiliates in Brazil and Paraguay, plus loyalty-program company Multiplus S.A. — fell 12.5% year-over-year (YOY) to $2.11 billion.

The drop in 2Q revenue is attributable to the continuing “weak macroeconomic environment in South America—especially in Brazil—and the devaluations of Latin American currencies during the period,” LATAM said.

LATAM’s 2Q passenger revenue decreased 13.7% YOY to $1.71 billion; 2Q cargo revenue fell 22.3% YOY to $260 million. The group’s consolidated yield fell 12.9% YOY to 5.7 cents. The group’s operating margin for the quarter was 0.1%, down 0.7 point YOY.

LATAM’s operating expenses for the quarter declined 12% YOY to $2.11 billion. The company reported $1.3 million in operating income for the quarter, down 92.4% from $17.2 million in operating income in 2Q 2015.

In an ongoing effort to reduce fleet assets by $2 billion to $3 billion by 2018, LATAM said it had reduced its fleet assets by $1.1 billion as of August 2016 through deferrals, cancellations and redeliveries.

LATAM said the company has deferred 12 Airbus A320neo and two A350 aircraft, and has also opted to redeliver five additional A320s, three A319s and one Boeing 777-200 freighter in 2017.


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