ATW Daily News

LAN profit falls 47.3% on declining yield

Wednesday October 28, 2009

LAN Airlines reported third-quarter net income of $52.1 million, down 47.3% from an $83 million profit in the year-ago period, as both passenger and cargo yield declined owing to the recession and the swine flu scare.

The Santiago de Chile-based carrier pointed out in a statement that "amidst the weakened global economic environment and despite the impact of the H1N1 flu on regional markets, LAN continued to report strong growth in passenger operations." It noted that the quarterly results were affected by a $14.4 million fuel hedging loss that was reversed from a $29.2 million hedging gain in the year-ago period.

It also said that during the quarter it finalized long-term financing from the US Export-Import Bank for three 767s to be delivered in the current quarter and next year.

Third-quarter revenue fell 19.1% to $917.5 million while expenses decreased 14.3% to $825.1 million, producing operating income of $92.4 million, down 46.1% from $171.3 million in the year-ago period. Traffic grew 7.6% to 7.58 billion RPKs on a 9.1% rise in capacity to 9.83 billion ASKs, producing a load factor of 77.1%, down 1.1 points. Passenger yield lowered 16.3% to 8.8 cents.

Cargo traffic dropped 7.5% to 669.1 million RTKs on a 4.2% cut in capacity to 973.8 million ATKs, producing a load factor of 68.7%, down 2.4 points. Cargo yield decreased 34.8% to 32.3 cents.

by Aaron Karp

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