LATAM Airlines Group posts net income of US$65.6m for first quarter 2017

LATAM Airlines Group reported an operating income of US$152.3m and a net income of US$65.6m. Operating margin reached 6.1% for the quarter, a decline of 3.3 pp compared to the same period last year. Although revenues improved on a year-over-year basis they were offset by a 44.4% increase in fuel prices. During the first quarter 2017, total operating revenues increased 6.4% to US$2,477.4m, reflecting LATAM’s proactive capacity management as well as stronger local currencies, especially in Brazil. Passenger revenues increased 7.6%, with a yield improvement of 6.9% and load factors increasing by 0.5 p.p. to 84.7%. Total operating expenses in the first quarter increased by 10.3% mainly as a result of a 29.0% or US$133.6m increase in fuel costs during the period. Additionally, labor costs increased US$36.5m as a result of the negative impact of the appreciation of local currencies and inflationary costs, despite the 12.4% reduction in average headcount in first quarter 2017 as compared to the same period 2016.