SANTIAGO Aug 13 Latin America's largest
carrier, LATAM Airlines Group SA, expects passenger demand and
margins to improve as bookings recover after the soccer World
Cup, a company executive said on Wednesday.
LATAM Airlines , which formed in 2012 from
the tie-up of Chilean flagship LAN and Brazil's TAM, reported on
Tuesday a loss of $59 million in the second quarter as
Brazilians chose to stay home and business travellers avoided
the country during the World Cup.
But bookings and yields were now returning to pre-World Cup
levels, TAM's chief executive, Claudia Sender, told investors
during a conference call on Wednesday.
"We have seen bookings coming back at very healthy levels,
very similar to what we were seeing before the World Cup," she
said. "We do expect a much healthier operation for the rest of
the third quarter."
The carrier had warned that the negative impact on its
margin from the World Cup would be between $140 million and $160
million, mostly affecting July, usually one of its strongest
"We should see margin expansion improve even in August but
obviously the impact of the third quarter and the month of July
which is seasonally very high is significant," said Sender.
"So definitely there will be a healthier margin in the
fourth quarter," she added.
LATAM has been cutting capacity on Brazilian routes and
deleveraging to try to shore up its margins and recover the
investment grade LAN enjoyed prior to the merger.
The airline is aiming to recover the coveted investment
grade, but that is more likely from 2016 rather than next year,
Another drag on performance has been the weaker economic
environment throughout South America. In particular, operations
in Argentina have been affected by the country's peso
devaluation and economic crisis.
However, LATAM said on Wednesday that the fall in demand
from Argentina had been less than the airline had expected and
was already beginning to recover.
(Reporting by Felipe Iturrieta; Writing by Anthony Esposito,
Editing by Rosalba O'Brien, Bernard Orr)