Latam Airlines Group passenger revenue increased 9 percent
year over year over the first half of this year as business travel volume resurges
in South America. "Corporate travelers are coming back to the
region," Latam SVP of the U.S, Canada and Caribbean Pablo Chiozza told BTN.
"There is a new flow coming back and forth to Argentina and a lot of
corporate travel going back and forth from Chile. Brazil is recovering, and it
looks like things are coming back to normal."
Latam has trimmed capacity on some routes with weak demand,
particularly between Brazil and the U.S. Over the first six months of 2017, it
kept capacity nearly flat as traffic increased 0.8 percent. Yield rose 0.8
percent largely as a result of a better pricing environment in Brazil,
according to Latam.
On domestic routes, Latam has been transitioning to a
"branded fares" model, with different fare levels that unbundle seat
selection, checked baggage and the ability to change tickets. In effect, it's acting
as a low-cost carrier on legacy routes but as a legacy carrier on international
flights. International passengers who are connecting to domestic flights
receive all the amenities of their international ticket throughout their
journey, so it has little impact on inbound international travel, Chiozza said.
All of Latam's domestic affiliates except in Argentina have launched that
model, he said.
As that transition has been a priority, Latam has delayed
integration into a single reservation system, the last major step of the Lan
and Tam merger. Former Tam flights, which are on the Amadeus system, will
eventually switch to Lan's Sabre system, and Chiozza said that should happen in
the first quarter of 2018.
Latam
reported an operating income of $48.2 million for the second quarter, a
quarterly record in what is traditionally its weakest quarter of the year.
However, it also reported a $138 million net loss for the quarter, which it
attributed largely to $120.2 million in foreign exchange losses.