LATAM Cargo posts 16.6% revenue rise in Q1

Cargo revenues at LATAM Cargo increased 16.6 per cent in the first quarter (Q1) of this year reaching $295.8 million – driven by a 7.1 per cent increase in cargo yields.

The carrier said the result was mainly due to a “better demand environment, increased revenue management and a higher fuel surcharge”. Cargo load factors reached 54.8 per cent, an improvement of 1.9 percentage points compared to Q1 2017.

Imports from North America and Europe to Brazil improved terms of revenues per ATKs, driven by higher imports of electronics and capital goods. Export markets are showing a recovery year-over-year (YOY) driven mainly by salmon exports from Chile.

As a result, cargo revenues per ATK improved by 11 per cent in comparison to Q1 of the previous year, consolidating and further improving the positive trend shown since the beginning of last year. Cargo capacity, measured in ATKs, rose five per cent in Q1.

Across the whole LATAM Airlines Group operating income was $228.5 million in Q1, 50.1 per cent higher than the same period of 2017. Net income reached $93.9 million in the quarter ended in March 2018, $28.3 million higher than the same period of last year. Total revenues rose 10.2 per cent YOY in Q1 to $2,730.5 million.

As for the LATAM fleet, during Q1 2018, the airline group took delivery of two Airbus A321 and returned one Boeing 767-300F. It also added one leased Airbus A330 to its fleet under a rental agreement with the Spanish airline Wamos Air, to mitigate the impact of fewer Boeing 787 aircraft available due to the extension of Rolls Royce’s engine maintenance program.

As of May 2018, LATAM had sold two Boeing 777-200F3 to Atlas Air, thus reducing its financial debt. As a result, its freighter fleet now comprises of nine Boeing 767-300F.

For 2018, the company has an order for 12 aircraft and adding two Airbus A350 that were previously subleased to Qatar, one Airbus A320 previously classified as hold for sale, and one Boeing 767-300F which was subleased to a third party.

LATAM also expects to convert one Boeing 767-300 from a passenger aircraft into a freighter and to return five aircraft during this period, therefore ending the year 2018 with a fleet of 318 aircraft.

For 2019, it expects the delivery of 14 new aircraft and to return eight. Additionally, it expects to convert two Boeing 767-300 from passenger aircraft into freighters, thus ending the year 2019 with an operating fleet of 324 aircraft.