LATAM Airlines sees Brazil recovery in second half

LATAM Airlines expects to see a recovery in its key Brazilian market in H2 2017 as it pares its fleet and rolls out a low-cost model in Chile to remain competitive, its CE said Monday. Battered by Brazil's recent economic downturn, Latin America's largest airline does not expect a return to its former investment grade status much before 2019, Enrique Cueto said. "To return to what we were before, that will take some time," he said. "(But) we are going to see positive results from the second half." LATAM Airlines was formed in a 2012 merger between Brazil's TAM and Chile's LAN. The carrier's leading position in the continent's air traffic has few parallels. But economic downturn in the region left the group struggling to live up to its early promise. Last week, it posted its first full-year profit since the merger. LATAM has cut capacity, reduced costs and chopped fleet commitments in a bid to remain competitive and is now in good shape to face a quickly evolving market, Cueto said. The company is rolling out a partial low-cost model in Chile this year as it faces a flurry of new entrants in South America and deals such as Avianca's proposed tie-up with United. "We're not going to be a low-cost company, but we will have a structure approximating the low-cost model," he said. "We want to look after our business passengers but also the kid who just wants to take a carry-on bag on the plane and pay less."<br/>