LATAM Airlines posts steep Q3 profit fall on Argentina, Brazil

LATAM Airlines reported a steep fall in Q3 profit due to lower passenger demand in Argentina and Brazil as well as higher fuel prices and competition from low-cost airlines. LATAM reported a net profit of $53m for the quarter, down from $160m a year earlier, according to a securities filing. But it said it was maintaining its guidance for the year, expecting an overall operating margin for 2018 of between 6.5 and 8%. It is focused on cost-cutting to offset higher expenses. “We are transporting more passengers with a leaner organization,” a company executive said. Demand in the quarter slowed in Brazil due to a weaker local currency, and demand fell significantly in Argentina, where the local currency faced an abrupt devaluation during the quarter, reducing passengers’ purchasing power. “We carried more passengers in all our markets except Argentina, where we cut capacity this year,” an executive said. Market conditions prompted LATAM to renegotiate commitments for future aircraft purchases, achieving a reduction of $2.3b in fleet expenses through 2021, the company said. The airline will also boost the number of available seats in some of its aircraft by 3% as improving utilization and seat count may allow it to grow with fewer aircraft. Revenue declined by 5% to $2.5b in the quarter compared with the same period in 2017.<br/>