LATAM post positive post-merger results

As the amalgamation of LAN and TAM airlines begins to settle, the newly-formed LATAM Airlines Group posted a net income of US$21.3 million for the third quarter of 2012.

LATAM Airlines Group began the integration of its business units and the necessary transformations to achieve estimated merger synergies, including a one-time accounting charge of US$70.4 million and US$19.5 million worth of transaction-related expenses.

These figures were not included in the net income reports.

The LATAM Group said it had advanced in the turnaround process of the domestic Brazil passenger operations, maintaining capacity discipline during the quarter.

Load factors improved by 10.6 percentage points compared to the third quarter 2011, however this was accompanied by a decreased demand for corporate travel.

Total revenues for the third quarter 2012 depreciated by 3.8 percent compared with 2011 third quarter results, subject to a 2.4 percent decrease in passenger revenue and a 14.4 percent decrease in cargo revenue.

“In addition to the challenges related to the transition to LATAM Airlines Group and to the turnaround of the Brazil domestic operations, operating revenues this quarter reflect the negative impact of the depreciation of the Brazilian currency and continued weak market demand in the cargo business,” LATAM Airlines Group said.

“The work done during the first months of integration has allowed us to reaffirm our synergy target of between US$600 and US $700 million, to be fully achieved by the fourth year after the merger.”

LATAM Airlines Group has also established new and improved agreements with international carriers, and has aligned particular commercial practices as well as parts of the on-board product on certain routes.

The Group also provided an outlook for future company operations.

“The Company expects passenger ASK (available seat kilometres) growth for full year 2012 for LATAM Airlines Group to be approximately three to four percent, mainly driven by the delivery of 40 passenger aircraft,” LATAM Airlines Group said.

“Regarding cargo operations, LATAM expects cargo ATK (available tonne kilometres) growth between zero and two percent for full year 2012.”

Sourced: etravelblackboardasia