The good news is finally in for LATAM Cargo, which overturned a spate of poor quarterly performance to post cargo revenues up 2.5 percent to US$272.2 million for the third quarter – the first year-on-year quarterly increase since Q2 2013.
Cargo traffic, measured in revenue tonne kilometers (RTKs), grew 3.5 percent over the quarter. The carrier pointed to import markets that “continue to show an improvement – especially in Brazil – thanks to better macroeconomic perspectives.”
However, underlying weaknesses that showed up in monthly reporting carried over to the quarterly results, with cargo tonnage carried down 3.6 percent and yields down by 1 percent, year-over-year.
Cargo accounted for just over 10 percent of the LATAM group’s total revenues in the third quarter.
LATAM Cargo cited imports – from North America and Europe to Brazil – as an area of growth that, “continues to show improvement year-over-year, driven by major imports of electronics and spare parts, as a result of a more stable market conditions in the country, as well as the appreciation of the Brazilian real.”
Other markets are also showing strength, such as imports to Chile and Argentina, which started to recover during the quarter, as well as export markets from Peru, namely asparagus. As a result, LATAM Cargo said that its cargo revenues per ATK improved by 8.2 percent, as compared to the same quarter of the previous year. This performance continued “the recovery trend we had during the first quarter of this year, after 19 consecutive quarters of revenue per ATK decline, as we have managed to adjust our capacity,” the carrier reported.
LATAM continued to cut freighter operations, as well, reducing maindeck space by 15.3 percent in the most recent quarter as it works to realign its capacity with changes in demand.
In the third quarter, cargo capacity, as measured in ATKs, declined 5.3 percent, including the 15.3 percent reduction in freighter operations, resulting in a load factor of 54.2 percent, a y-o-y improvement of 4.6 percentage points over Q3 in 2016.