LATAM Airlines Group reported a net income of $21.3 million in the third quarter.
That number excludes a one-time charge of $70.4 million tied to a rise in Chilean corporate income taxes and excludes $19.5 million in transaction-related expenses to merge LAN and TAM. The merger was completed on 22 June.
Third quarter revenues for LATAM totaled $3.3 billion, down 3.8% from $3.48 billion in the same period a year earlier. The change can be attributed to a 2.4% decrease in passenger revenues, as well as a $14.4% drop in cargo revenues, the company says. These losses were partially offset by a 19.6% increase in additional revenues. Passenger revenues made up 84.2% of total revenues, and cargo 13.4%.
LATAM, like its cargo carrier peers, is facing weak demand on Latin American cargo routes as well as increased competition from other operators on its routes. Total cargo capacity decreased 3.2%, which was partially offset by integrating a new Boeing 777 freighter in its fleet towards the end of the quarter. Cargo load factors decreased from 58.7% to 57.2%.
Load factors for the domestic passenger market in the third quarter improved by 10.6% compared to the same period a year earlier, totaling 78.1%.
The 24% depreciation of the Brazilian real has affected LATAM's Brazil operations, as well as a lower demand for corporate travel, says the airline group.
The airline group says it expects to achieve its target of between $600 and $700 million four years after the merger of LAN and TAM, which it will achieve from integrating its business units.