LATAM Airlines Group reported operating income of $1.3 million for second quarter 2016 and $220.4milliono for the first half of 2016. Operating margin reached 0.1% for the quarter, representing a slight decrease of 0.7% as compared to the second quarter 2015. Operating margin for the first half of 2016 reached 5.0%, in line with our guidance and 0.3% above the same period of 2015.
Total revenues during the second quarter 2016 declined by 12.5% due to a 13.7% decline in passenger revenues and a 22.3% decline in cargo revenues. This revenue decrease continues to reflect a weak macroeconomic environment in South America – especially in Brazil – and the devaluations of Latin American currencies during the period. Part of this decline was offset by the continued positive trend in costs, with total operating expenses declining by 12.0%, resulting in a 10.5% decline in costs per ASK equivalent.
As of August 2016, LATAM Airlines Group has reduced fleet assets for 2017 – 2018 by US$1.1 billion, in line with the company’s previously announced plans to achieve a decrease of US$2.0 to US$3.0 billion in our expected fleet assets for 2018. This reduction was achieved through the deferral of twelve Airbus A320neos and two Airbus A350s, which represent a total reduction of US$829 million in fleet commitments for 2017 and 2018.
The company will also redeliver five more Airbus A320s, three Airbus A319s, and one Boeing 777-200F in 2017 as compared to our previous quarter ́s fleet plan, representing a total reduction of approximately US$260 million in fleet assets.
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