BLEAK SECOND QUARTER FOR LAN

Dino D'Amore
By Dino D'Amore July 27, 2011 10:31

BLEAK SECOND QUARTER FOR LAN

Chilean flagship carrier LAN Airlines has posted a 73.7% drop in second-quarter net profit to $15.9 million owing to high fuel prices and because ash from the Puyehue-Cordon Caulle volcano chain in southern Chile grounded many of its flights.

Sales were up 28.8% to $1.33 billion, however, versus $1.03 billion in the second quarter 2010. Sales were driven by strong passenger and cargo traffic on the back of strong regional economic growth and robust domestic demand.

Operating profit was also curtailed by the purchase of Columbian airline Aires late last year, which produced an $11 million loss.  LAN also paid a $66 million settlement in the U.S. in June relating to a class-action suit against its cargo unit.

LAN’s earnings before interest, taxes, depreciation and amortization, or Ebitda, fell 20.3% in the second quarter to $156.2 million from $196.0 million, the company said.

LAN said it expects passenger capacity–or available seat kilometers–to grow 14% to 16% this year and cargo capacity –or available ton kilometers–to expand 12% to 14% in 2011, as the company adds new planes to its fleet and operations in Colombia take hold.

LAN revised its fleet expansion plan, saying it now plans to invest $5.11 billion, a 10% increase over its prior estimate, through 2014 to increase its total passenger and cargo fleet to 193 in 2014 from 149 planes in 2011.

Dino D'Amore
By Dino D'Amore July 27, 2011 10:31
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