LATAM Airlines Group reports consolidated operating income of US$6.5 million for second quarter 2018

LATAM Airlines Group S.A., has reported its consolidated financial results for the quarter ending June 30, 2018. LATAM makes reference to the consolidated entity, which includes passenger and cargo airlines in Latin America.

In the second quarter of 2018, LATAM Airlines Group reported a US$6.5 million operating income and a 0.3% operating margin, 1.8 percentage points lower than the same period of 2017. During the quarter, the Company faced a cabin crew strike in Chile and was also impacted by a general trucking strike in Brazil, resulting in a total operational margin impact of US$38 million. Furthermore, due to an industrywide issue affecting Rolls Royce engines, LATAM had a lower availability of its Boeing 787 fleet, part of which is still on ground awaiting engine maintenance by Rolls Royce. Nevertheless, for the first half of 2018, operating income rose 17.2% to US$235.0 million, accounting for an operating margin of 4.6%, 0.4 percentage points higher than the same period of 2017.

LATAM’s bottom line totaled a US$114 million loss in the quarter ended June 2018, a 17.7% reduction compared to the second quarter 2017, despite the negative impact of a US$79 million foreign exchange loss during the quarter mainly due to the depreciation of the Brazilian real. For the first half of 2018, the net loss amounted to US$19.7 million, 73% lower than the first half of 2017.

Total revenues rose 3.7% year-over-year in the second quarter 2018 to US$2,357 million. This increase was mainly explained by a 3.6% increase in passenger revenues, resulting from a 4.6% increase in available seat kilometers (ASK), together with a 1.0% decline in revenue per available seat kilometer (RASK), pressured by the international long haul routes from Brazil, especially to the US, while RASK in Spanish Speaking Countries international routes remains healthy. Cargo revenues continued to recover during the quarter, growing 16.8% year-over-year in the quarter, driven by a recovery of both imports and exports in the region.

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