LATAM Airlines Group reports Q2 results

Dino D'Amore
By Dino D'Amore August 14, 2015 16:53

LATAM Airlines Group reports Q2 results

On the third anniversary of the merger between LAN and TAM, LATAM Airlines has reported operating income of US$17.2 million with an operating margin of 0.7% for the second quarter 2015, an increase of 0.2 percentage points as compared to the year-ago period. This result was driven by a 20.7% reduction in the company’s cost per ASK equivalent, including the effect of lower fuel prices. Excluding fuel, cost per ASK equivalent decreased by 13.8%, reflecting efficiencies related to the airline’s cost savings plan, as well as the effect of local currency depreciations.

Total revenues during the second quarter 2015 declined by 20.8%, reflecting a weak macroeconomic environment in Brazil and significant devaluations of Latin American currencies.

Considering the impact of the current economic scenario in Brazil, TAM is adjusting its domestic network and reducing domestic capacity by approximately 8% to 10% by year-end. As a result, LATAM has revised its capacity (ASK) growth for this year for the domestic market in Brazil from 0% growth to a contraction of 2 to 4% as compared to 2014.

LATAM has stated that it is reviewing its fleet plan and fleet requirements for the coming years, and is currently evaluating whether to postpone a number of wide body passenger aircraft currently scheduled for delivery in 2017 and 2018, as well as to sublease at least one freighter aircraft.

Dino D'Amore
By Dino D'Amore August 14, 2015 16:53