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Published on : Wednesday, November 13, 2013
Having completed the first year of the merger between LAN Airlines S.A. (“LAN”) and TAM S.A. (“TAM”), we are very satisfied to show a strong improvement in operating results, reflecting the successful implementation of the integration process, synergy and efficiency initiatives, the successful turnaround of the domestic Brazil operations and the rationalization of international passenger operations. The 7.6% operating margin achieved this quarter shows the results of the changes implemented over the last year, many of which are still ongoing.
TAM’s domestic operations in Brazil reflect the successful turnaround implemented over the past year, with a RASK increase of 19% (measured in Brazilian Reais, “BRL”) for the third quarter of 2013 as compared to the third quarter of 2012, driven by healthy load factors of 81.6% as well as yield improvements. Together with ongoing cost initiatives, this has led to substantial improvements in the profitability of TAM’s domestic operations.
LATAM has carried out a highly effective strategy to reduce its balance sheet and operating exposure to the volatility in the foreign exchange rate fluctuations of the Brazilian currency, through operational measures as well as financial hedging. As a result, the Company is better positioned to face BRL fluctuations in the coming quarters. On November 7, 2013, LATAM Airlines Group successfully issued a 7-year securitized bond, securitizing future flow receivables in the amount of US$450 million, at a coupon of 6.0%. The use of proceeds is primarily for the repayment of short-term debt.
Source:- Latam Airlines