LATAM Airlines reported a net loss of $114m in its Q2, a period that is usually the weakest for air travel companies throughout the region. But this year has brought additional challenges for airlines, including rising oil prices and a weak Brazilian real that makes international travel more costly for Brazilians, a top market for LATAM together with Chile. The company said the weaker real had netted a $79m loss. LATAM has struggled in recent years, amid a merger with Brazilian airline TAM in 2012 that has not boosted profits and a more intensely competitive market that prompted the airline to adopt a low-cost model for its domestic flights, including new charges for checked luggage and preferred seating options. <br/>
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Japan Airlines (JAL) is looking to significantly increase the seat density of the Boeing 787-8s that are assigned to its newly announced LCC unit and is eyeing markets in Asia, Europe and the Americas. JAL formally established the new corporate entity Aug. 2 under the interim name TBL. JAL owns 100% of the company and named Shinto Nishida as representative director responsible for the organization. Its headquarters will be at Tokyo Narita Airport. JAL VP-global sales Steve Smith said the main driver for establishing a long-haul LCC was that forecasts show 50% of the seat market share in Asia will be LCC—and the LCC share will reach 50% even sooner in Europe and North America. “That’s one in every two seats,” Smith noted. “We are a high-yield carrier and we are missing out on a big part of the market.” The plan is for the JAL LCC to start services in the summer of 2020—the same year Japan will host the summer Olympics—with two 787-8s.<br/>
Cathay Pacific has said it is close to sealing a deal in a long-running dispute with pilots over pay, allowances and working schedules, despite scepticism from union sources. In an internal memo, the carrier said it made “progress” in recent weeks on contract details for pilots who signed with the company before 2008. It claimed the Hong Kong Aircrew Officers’ Association was willing to put a new offer to a vote among its members. Chris Kempis, the airline’s new flight operations director, said last week: “We are approaching what I hope to be the concluding phase of negotiations with the HKAOA [and] the opportunity for a broad agreement.” Union sources confirmed preliminary agreements had been made on more costly housing allowances and work schedules set out in the old and new contracts of pilots, but poured cold water on an imminent deal. “The company is just not getting it. To say it’s close, I don’t see it as close, there is still a pretty large gulf [on outstanding issues],” a senior union source said. The association accounts for about 2,300 Cathay pilots in Hong Kong, out of its total of 3,300 worldwide. An HKAOA survey conducted in May revealed a lack of goodwill towards Cathay Pacific among aircrew, with almost half of 1,603 respondents saying they were looking to leave the airline and seven out of 10 indicating they would be willing to engage in industrial action at the risk of losing their jobs.<br/>