LAN saw its profits more than double in the third quarter on the back of a recovery in both the cargo and passenger markets.
The Chile-based airline group this afternoon reported a 104% increase in net profits to $106 million and a 70% spike in operating profits to $157 million. Passenger revenues were up 20% to $800 million while cargo revenues surged 49% to $323 million.
On the passenger side, yields improved by 5% during the quarter. Passenger capacity was up by 12%, driven mainly by new long-haul flights. During the third quarter LAN added San Francisco, Paris, Brasilia and the Galapagos to its network.
On the cargo side, yields were up 26%. LAN says it was able to "exploit the recovery in global cargo flows" and benefited from the implementation of new revenue management tools.
LAN Cargo capacity was up 19% in the quarter. This was partly driven by an expanded European operation, where LAN has begun using its new fleet of 777 freighters.
The airline group, in reporting its third quarter results, said "strong operating results during the quarter are evidence of a global recovery, as well as continued growth opportunities in both cargo and passenger markets. LAN is well-positioned to take advantage of these opportunities based on the strategic actions undertaken throughout 2009, which have enhanced LAN's leadership position in both passenger and cargo markets in Latin America."
During the quarter LAN announced its intention to merge with Brazil's TAM and create a new parent company to be called LATAM Airlines Group. Last week the two airlines announced that they had submitted the final transaction structure for LATAM to Brazil's ANAC for approval.
During the third quarter LAN took delivery of five additional A320s, giving it a fleet of 58 A320 family aircraft. As of 30 September, LAN's widebody fleet consisted of 28 Boeing 767 passenger aircraft, nine 767 freighters, two 777 freighters and five A340 passenger aircraft.
LAN says in the fourth quarter it plans to add five more A320s and one more 767 freighter. Its 2011 fleet plan includes the delivery of 18 A320s, three 767 passenger aircraft, two 767 freighters and two 787-8s while five A318s will exit.
The airline group now expects to grow passenger capacity by between 15% and 17% next year, compared to about 10% this year. Cargo capacity is expected to grow 13% to 15% in 2011, compared to a projected 20% in 2010.