Chile's LAN Airlines has reported a net income of $16 million for second quarter of 2011, a decrease of 73.7% from $60.6 million in the corresponding period of last year.
Results of the quarter were significantly impacted by one-time non-operating effects, as well as operational factors including higher fuel prices, the presence of volcanic ash on certain routes and the start-up of LAN's operations in Colombia.
The airline's operating income dipped by 50.5% year on year from $113 million to $55.8 million in the three-month period, while its operating margin declined to 4.2% compared with 10.9% in second quarter of 2010.
Revenues for the quarter were up by 28.8% from $1.03 billion to $1.33 billion, driven by a 31.8% increase in passenger revenues and a 26.3% growth in cargo revenues.
Its active hedging strategy resulted in a $20.7 million fuel hedge gain, said the carrier. However, the company's operating expenses increased by 38.5% from $921 million to $1.27 billion.
In the first quarter of 2011, LAN took deliveries of one Airbus A320. The company also announced in June the signing of an agreement to purchase 20 modern, eco-efficient A320neo family aircraft to be delivered between 2017 and 2018.
LAN's net income in the first half of 2011 amounted to $113 million compared with $149 million in the same period last year. Its operating income dipped by 18.2% to $209 million, while its operating margin decreased from 12.4% in 2010 to 7.8% in 2011.
Total operating revenues for the first six months grew by 30.4% to 2.7 billion, driven by a 31.9% increase in passenger revenues and a 28% growth in cargo revenues.
At the end of the quarter, LAN reported $375 million in cash and cash equivalents representing 7.3% of its revenues for the last twelve months.