LAN Airlines’ cargo revenue soars

Although LAN Airlines experienced an 11-percent, year-over-year, drop in net income in the third quarter of 2011, the Latin American carrier reported double-digit cargo gains. Freight revenue, which surged 22.5 percent from 2010, was driven by increased capacity and load factor, LAN Airlines executives revealed.

LAN Airlines particularly benefited from an influx of shipments to Latin America and high volumes of commodity exports, such as salmon. To address increased demand, LAN relied heavily on the three Boeing 767-300F freighters it procured between November 2010 and January 2011.

Routes to North America and Europe were particularly profitable for the Latin American carrier, company officials remarked.

Not surprisingly, capacity on LAN flights rose significantly in the third quarter, highlighted by a 10.7-percent, year-over-year, increase. This also led to a 0.6-percent increase in load factor, which averaged 69.3 percent in the quarter ending September 30.

Cargo yields also improved during this period, growing 9.7 percent from the third quarter of 2010. LAN officials attribute this increase to itinerary optimization, fuel surcharges and improved yield management tools. They also anticipate future growth of their cargo sector as they continue to utilize the bellies of their passenger aircraft for freight transportation.

Not that LAN’s passenger operations aren’t profitable on their own. Passenger revenue for the Latin American carrier rose 32.6 percent during the third quarter of 2011, propelled by 13.7-percent increased traffic and 16.6-percent higher yields.

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