UPDATE 1-LATAM Airlines posts loss as fans stay put for World Cup
(Adds CEO comments, background, details)
SANTIAGO Aug 12 (Reuters) - LATAM Airlines Group SA , Latin America's largest carrier, on Tuesday posted a net loss for the second quarter of $58.9 million as demand dried up during the World Cup in Brazil and due to weaker currencies in Chile and Argentina.
That compared with a wider net loss of $329.8 million in the second quarter of 2013.
The company, formed in 2012 from the tie-up of Chilean flagship LAN and Brazilian airline TAM, has been cutting capacity on Brazilian routes and deleveraging to try to shore up its margins and debt rating.
"Results this quarter were negatively affected by reduced passenger and cargo demand during the FIFA World Cup soccer tournament held in Brazil, as well as by very week seed exports in the cargo business," LATAM Airlines said.
The carrier reiterated that the negative impact on its margin from the World Cup would be between $140 million and $160 million, with sales down as Brazilians chose to stay home and non-sport visitors avoided the host country.
It underscored that only $30 million of that negative impact was felt in June, while the remainder would be seen in July.
LATAM Airlines cut its margin forecast for 2014 last month, blaming the World Cup in June and July for hitting business and tourist travel, adding that weaker Latin American economic growth and currency headwinds were also a factor.
On a brighter note, the airline said investment in Brazilian infrastructure for the World Cup would be a long-term positive for the country's airlines.
"The significant infrastructure investments in Brazil prior to the World Cup, especially in airports, will have a lasting and very positive impact on the continued development of the airline industry in Brazil," said Enrique Cueto, CEO of LATAM Airlines Group. "TAM's move to Terminal 3 at (Sao Paulo's) Guarulhos Airport and to Pier 2 at the Brasilia airport will enable us to continue improving connectivity through our hubs, and increasing on-time performance."
The company has domestic operations in Argentina, Brazil, Chile, Colombia, Ecuador and Peru. (Reporting by Anthony Esposito; editing by G Crosse, David Gregorio)
© Thomson Reuters 2017 All rights reserved.