While South American carrier LATAM has been in the doldrums for quite some time, the slide in its revenues was especially pronounced in the carrier’s second quarter cargo results, showing revenues down 22.3 percent, year-over-year. Overall revenues, including passenger numbers, for the quarter were down 12.5 percent.
LATAM attributed its poor performance to “a weak macroeconomic environment in South America – especially in Brazil – and the devaluations of Latin American currencies during the period.” However, a turbulent restructuring following the merger of LAN and TAM airlines is also a factor.
Despite the setbacks, stakeholders maintain that the merger is a long-term bet, and with signs of an economic turnaround in Brazil, LATAM execs are hoping to see less red in the future.
In numbers, the second quarter saw capacity fall 6.1 percent to 1.63 billion available tonne kilometers (ATKs), while revenue tonne kilometers (RTKs) fell 13.3 percent to 797 million. LATAM flew 224,000 tons of cargo over the quarter, a 9.4 percent decline, while the carrier’s load factor also slid four percentage points to 48.8 percent.
Quarterly results more or less conformed to half-year results for LATAM. ATKs were down 4.8 percent in the first half of 2016, RTKs were down 11.5 percent, and tonnes transported were down 5.3 percent to 458,000. LATAM’s half-year load factor was also anemic – just 50 percent.
LATAM made news last month when Qatar airways announced plans to buy up to 10 percent of the Chile-based carrier’s shares. Now, LATAM is counting on this cash infusion to supplement its cost-cutting initiatives implemented over the last few years. “This is a move that not only strengthens our liquidity position, but offers the opportunity to explore stronger ties with this global player,” the second-quarter publication noted.
Source: aircargoworld