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SANTIAGO, July 18 (Reuters) - LATAM Airlines, Latin America's largest airline, cut its margin forecast for 2014, blaming the soccer World Cup in Brazil in June and July for hitting business and tourist travel.
LATAM , which was formed in 2012 in a tie-up between Chile's LAN and Brazil's TAM, said it now expects an operating margin this year of between 4 percent and 5 percent, down from its previous estimated range of 6 percent to 8 percent.
The negative impact on its margin from the World Cup would be between $140 million and $160 million, the airline said, with sales down as Brazilians chose to stay home and non-sport visitors avoided the host country.
Airlines had previously warned that the World Cup would be bad for business. On Wednesday, TAM said Brazilian domestic passenger traffic had fallen 5 percent during the tournament, although that it said that was not as much as expected.
Weakening economic growth in Latin America and currency headwinds were also a factor in the downgrade, LATAM added.
LAN previously enjoyed double digit margins but the merged airline has struggled to return to those days. The airline has been cutting capacity on Brazilian routes and deleveraging to try to shore up its margins and debt rating.
Although it has made progress in filling its planes by reducing flights, fleet restructure costs and a weak Brazilian real have held back earnings.
Shares of LATAM, which have slid about 14 percent since the beginning of May, closed at 7,499 pesos on Friday, valuing the company at around $7.3 billion. (Reporting by Rosalba O'Brien; Editing by Chris Reese, Bernard Orr)