{"id":3073,"date":"2018-11-21T11:03:03","date_gmt":"2018-11-21T17:03:03","guid":{"rendered":"http:\/\/planesintheair.com\/?p=3073"},"modified":"2018-11-21T11:03:03","modified_gmt":"2018-11-21T17:03:03","slug":"latam-airlines-posts-steep-third-quarter-profit-fall","status":"publish","type":"post","link":"https:\/\/planesintheair.com\/?p=3073","title":{"rendered":"LATAM Airlines Posts Steep Third-Quarter Profit Fall"},"content":{"rendered":"

SANTIAGO (Reuters) – LATAM Airlines (LTM.SN), the biggest airline group in Latin America, reported a steep fall in third-quarter profit due to lower passenger demand in Argentina and Brazil as well as higher fuel prices and competition from low-cost airlines.<\/span><\/p>\n

LATAM reported a net profit of $53 million for the quarter, down from $160 million a year earlier, according to a securities filing.<\/span><\/p>\n

But it said it was maintaining its guidance for the year, expecting an overall operating margin for 2018 of between 6.5 and 8 percent. It is focused on cost-cutting to offset higher expenses.<\/span><\/p>\n

“We are transporting more passengers with a leaner organization,” a company executive told analysts on a conference call.<\/span><\/p>\n

Morgan Stanley raised its target price for LATAM shares traded in the New York stock exchange to $9 following the earnings release, from a previous target price of $8.80.<\/span><\/p>\n

Shares were up 3.4 percent at $9.26 on Wednesday morning.<\/span><\/p>\n

Demand in the quarter slowed in Brazil due to a weaker local currency, and demand fell significantly in Argentina, where the local currency faced an abrupt devaluation during the quarter, reducing passengers’ purchasing power.<\/span><\/p>\n

“We carried more passengers in all our markets except Argentina, where we cut capacity this year,” an executive said.<\/span><\/p>\n

Lower demand and increased fuel expenses due to higher oil prices has slashed profits across regional airlines. One of LATAM’s biggest competitors, Brazil’s Gol Linhas Aereas Inteligentes SA (GOLL4.SA), reported a loss of $110 million during the quarter.<\/span><\/p>\n

Market conditions prompted LATAM to renegotiate commitments for future aircraft purchases, achieving a reduction of $2.3 billion in fleet expenses through 2021, the company said.<\/span><\/p>\n

The airline will also boost the number of available seats in some of its aircraft by 3 percent as improving utilization and seat count may allow it to grow with fewer aircraft.<\/span><\/p>\n

Revenue declined by 5 percent to $2.5 billion in the quarter compared with the same period in 2017.<\/span><\/p>\n

In the quarter, LATAM spent the equivalent of 30 percent of its revenue on fuel, compared with 21 percent a year earlier.<\/span><\/p>\n

In comparison, Gol spent 37 percent of its revenue on fuel in the same quarter, up from 26 percent a year earlier.<\/span><\/p>\n

(Reporting by Antonio de la Jara in Santiago and Marcelo Rochabrun in Sao Paulo; Writing by Marcelo Rochabrun; Editing by Bernadette Baum)<\/span><\/p>\n

\"\"<\/p>\n","protected":false},"excerpt":{"rendered":"

SANTIAGO (Reuters) – LATAM Airlines (LTM.SN), the biggest airline group in Latin America, reported a steep fall in third-quarter profit due to lower passenger demand in Argentina and Brazil as well as higher fuel prices and competition from low-cost airlines. LATAM reported a net profit of $53 million for the quarter, down from $160 million a year earlier, according to a securities filing.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[797,89,1397,868,1103],"tags":[2385,420,118,914,881,184,2491,2494,1924,2493,1757,182,745,2386,440,2281,2384,1923,2492,1428,412,1685,1570,1323,1288,1289,2490],"class_list":["post-3073","post","type-post","status-publish","format-standard","hentry","category-airline-news","category-aviation-news","category-stock-news","category-transportation-news","category-travel-news","tag-aereas","tag-airline","tag-airlines","tag-america","tag-argentina","tag-brazil","tag-chile","tag-competition","tag-cost","tag-demand","tag-fuel","tag-gol","tag-group","tag-inteligentes","tag-latam","tag-latin","tag-linhas","tag-low","tag-ltm","tag-morgan-stanley","tag-news","tag-passenger","tag-price","tag-profit","tag-reuters","tag-sa","tag-santiago"],"_links":{"self":[{"href":"https:\/\/planesintheair.com\/index.php?rest_route=\/wp\/v2\/posts\/3073","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/planesintheair.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/planesintheair.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/planesintheair.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/planesintheair.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3073"}],"version-history":[{"count":1,"href":"https:\/\/planesintheair.com\/index.php?rest_route=\/wp\/v2\/posts\/3073\/revisions"}],"predecessor-version":[{"id":3075,"href":"https:\/\/planesintheair.com\/index.php?rest_route=\/wp\/v2\/posts\/3073\/revisions\/3075"}],"wp:attachment":[{"href":"https:\/\/planesintheair.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3073"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/planesintheair.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3073"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/planesintheair.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3073"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}