SANTIAGO, Nov 13 (Reuters) - Regional carrier LATAM Airlines Group SA posted a worse-than-expected net loss and a sharp drop in revenues for the third quarter on the back of weak economic growth in South America and the depreciation of Brazil’s real currency.
LATAM reported late on Thursday a net loss of $113.3 million for the quarter. That compares to a loss of $107.8 million in the same period 2014 and analysts’ forecasts for a $99.1 million loss.
“As a result of the complex macroeconomic situation in South America and the significant devaluations of Latin American currencies during the period, especially the 55.5 percent depreciation of the Brazilian real,” total revenues in the third quarter fell 20 percent to $2.5 billion, said the carrier.
LATAM was formed from a 2012 tie-up between Chilean airline LAN and Brazilian carrier TAM, but it has struggled to live up to hopes for the merger amid sluggish South American economies and unfavorable currency trends.
The company maintained its guidance for an operating margin of between 3.5 percent and 5 percent for full year 2015.
LATAM added that total passenger ASK growth, or available seat kilometers, is expected to be between 0 percent and 3 percent in 2016.
Broken down, ASKs are forecast to decline 6 percent to 9 percent next year in Brazil and to grow between 6 percent to 8 percent in the Spanish-speaking countries LATAM operates in, including Chile, Argentina, Peru, Ecuador and Colombia.
LATAM said it is planning to invest $5.5 billion in fleet renewal and upgrades in the 2015-2017 period. (Reporting by Anthony Esposito; Editing by Frances Kerry)