Total revenues at LATAM Airlines inched up 1.5 percent, year over year, to $3.4 billon on the strength of the carrier’s passenger revenues, while cargo revenues fell 3.2 percent during the first quarter.
As the group continues putting together the LAN and TAM businesses, it saw operating income shoot up 149.8 percent during the first quarter to $114.2 million as operating margin rose to 3.4 percent. Net income dropped 48.9 percent, year over year, to $42.7 million.
LATAM’s cargo revenue decline derived from a slight decrease in cargo traffic coupled with a 3.2-percent decline in yields. Cargo demand to Brazil and other destinations in Latin America showed the biggest dropoffs. Capacity increased 3.8 percent due to two new Boeing 777 freighters which came online during the second half of 2012. Load factors fell during the quarter to 56.1 percent.
According to a company release, LATAM is looking at its fleet plan and will adjust capacity expansions to match the current market. The carrier currently expects capacity to increase 2 percent to 4 percent during 2013.
Officials have said their blended target of between $600 million and $700 million by June 2016 is still on track. Merger activities are expected to hit $250 million to $300 million by the end of the year. - Jon Ross