(Adds details on EBITDAR margin, operating revenue, and
guidance; adds context; modifies title)
SANTIAGO May 15 LATAM Airlines, Latin America's
largest airline, reported a slightly smaller profit than
expected in the first quarter as local currency appreciation and
inflation raised costs, the company reported on Monday.
The airline, which was formed via a 2012 tie-up of Chile's
LAN and Brazil's TAM, said net income was $66 million in the
three months to end-March, lower than a Reuters forecast for
$71.9 million. That represented a fall in net income from the
first quarter of 2016, when the company reported a profit of
The company's EBITDAR margin, which is used to measure
airlines' profitability and cash flow, also fell slightly in
yearly terms to 22.4 percent from 25.4 percent in the first
quarter of 2016.
LATAM's operating revenues, however, increased 6.4 percent
in yearly terms to $2.477 billion. The company said currency
appreciation that raised costs also helped raise income.
The airline said it was maintaining its previous guidance
for a 2017 operating margin of between 6 and 8 percent, as well
as a previously announced reduction in its 2016-2018 fleet
commitment by $2.2 billion.
In March, the airline posted its first yearly net profit
since the company formed four years ago, helped by improving
conditions in key market Brazil.
(Reporting by Gram Slattery; Editing by Andrew Hay)