Weak LatAm hits LATAM


LATAM AIRLINES has seen year-on-year cargo volumes decline in November by 2.5 per cent to 394 million revenue tonne kilometres (RTK), because of weak cargo volumes into Latin America.

The November result is slightly above October, when RTK was 393 million. It is substantially above the September cargo figures, when its RTK was 349 million. The November is the highest RTK figure of the year, yet it is still down on 2013. In January, RTK was 351 million. No figures were released for February and March.

In April, RTK was 360 million, rising to 364 million in May. It dropped to 328 million in June before rising to 346 million in July. It dipped slightly in August to 344 million and rose a small amount in September to 349 million. LATAM Airlines says: “Cargo traffic decrease was driven by weaker imports into Latin America.”

The RTK has dropped in every month of 2014 except January and October, when it rose by 0.9 per cent and 1.5 per cent, respectively. February saw a decline of 0.8 per cent, followed by drops of 6.6 per cent in March and 11.5 per cent in April, the biggest fall of the year. May saw a decline of 0.7 per cent, followed by a drop of 5.1 per cent in June. July saw the smallest decline of the year of 0.4 per cent. August was down by 1.9 per cent and September saw a drop of 3.2 per cent. Year-to-date (YTD) RTK is down 2.9 per cent to 3.9 billion.

The weak cargo volumes throughout 2014 have led to losses. In the third quarter of 2014 LATAM made a loss of $107.8 million, which it blamed on the weakness of South American economies. LATAM chief executive officer, Enrique Cueto, says: “Results have not met our expectations, mainly because we are facing a context with increased competition, a weaker macroeconomic scenario in South America, especially in Venezuela and Argentina and depreciated local currencies.”

Available tonne kilometres (ATK) fell by 3.8 per cent in November to 641 million. In January, ATK was cut by 4.8 per cent, followed by bigger drops in February, March and April of 5.7 per cent, 9.2 per cent and 11.5 per cent, respectively. May saw a drop of 4.4 per cent, followed by a bigger decline in June of 6.4 per cent. ATK in July was down 5.3 per cent, followed by a 5.6 per cent drop in August. It fell 3.6 per cent in September. October saw the smallest drop of the year of 2.5 per cent before declining by 3.8 per cent in November. YTD ATK is down 5.7 per cent to 6.6 billion.

On a positive note, the load factor in November rose by 0.8 percentage points to 63.9 per cent. The load factor has risen in every month of 2014 except April, when it stayed the same.


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