(Adds CEO comments, background, details)
SANTIAGO Aug 12 LATAM Airlines Group SA
, Latin America's largest carrier, on Tuesday
posted a net loss for the second quarter of $58.9 million as
demand dried up during the World Cup in Brazil and due to weaker
currencies in Chile and Argentina.
That compared with a wider net loss of $329.8 million in the
second quarter of 2013.
The company, formed in 2012 from the tie-up of Chilean
flagship LAN and Brazilian airline TAM, has been cutting
capacity on Brazilian routes and deleveraging to try to shore up
its margins and debt rating.
"Results this quarter were negatively affected by reduced
passenger and cargo demand during the FIFA World Cup soccer
tournament held in Brazil, as well as by very week seed exports
in the cargo business," LATAM Airlines said.
The carrier reiterated that the negative impact on its
margin from the World Cup would be between $140 million and $160
million, with sales down as Brazilians chose to stay home and
non-sport visitors avoided the host country.
It underscored that only $30 million of that negative impact
was felt in June, while the remainder would be seen in July.
LATAM Airlines cut its margin forecast for 2014 last month,
blaming the World Cup in June and July for hitting business and
tourist travel, adding that weaker Latin American economic
growth and currency headwinds were also a factor.
On a brighter note, the airline said investment in Brazilian
infrastructure for the World Cup would be a long-term positive
for the country's airlines.
"The significant infrastructure investments in Brazil prior
to the World Cup, especially in airports, will have a lasting
and very positive impact on the continued development of the
airline industry in Brazil," said Enrique Cueto, CEO of LATAM
Airlines Group. "TAM's move to Terminal 3 at (Sao Paulo's)
Guarulhos Airport and to Pier 2 at the Brasilia airport will
enable us to continue improving connectivity through our hubs,
and increasing on-time performance."
The company has domestic operations in Argentina, Brazil,
Chile, Colombia, Ecuador and Peru.
(Reporting by Anthony Esposito; editing by G Crosse, David