UPDATE 1-LATAM Airlines reports slim profit, says Brazil 'very challenging'

miércoles 11 de mayo de 2016 18:32 GYT

(Adds comments on Brazil, fleet restructure, capacity cuts)

By Antonio De la Jara

SANTIAGO May 11 (Reuters) - LATAM Airlines , Latin America's largest airline, reported a swing to profit in the first quarter, broadly in line with expectations, as fuel costs fell and Latin American currencies stabilized.

The company, which was formed in the 2012 merger of Chile's LAN and Brazil's TAM, said net income was $102 million in the three months to end-March.

That compared to a Reuters forecast for a profit of $97 million. It made a loss of $40 million in the same period last year.

Revenue fell to $2.3 billion from $2.8 billion a year ago.

The airline has struggled to fulfill the hopes behind its merger, held back by tough economic conditions and weakening currencies in the region.

It has reported a full-year loss for the last four years in a row, and has said that its future recovery will be pinned to that of its key Brazilian market, which is mired in a deep recession and a political crisis with the impeachment of President Dilma Rousseff looming.

"We continue seeing a very challenging scenario in Brazil," said head of investor relations Gisela Escobar at a presentation to reporters. "As well as all the volatility that the political process is generating, business demand is not improving."   Continuación...