LAN’s 2011 profit down 23.7% to $320.2 million

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Published: February 2, 2012

LAN Airlines 767. Courtesy, Boeing

Chile’s LAN Airlines posted 2011 net income of $ 320.2 million, down 23.7% from a net profit of $ 419.7 million in 2010. Operating income decreased by 13.4% to $ 539.7 million while operating margin slid 4.3 points to 9.4%.

Higher fuel prices, the impact of starting up LAN Colombia ( ATW Daily News, Dec. 6, 2011 ) and the volcanic ash cloud that disrupted air traffic in Argentina and Chile were cited as the main causes of the net income dip.

Fourth-quarter net income declined 31.6% compared to the 2010 December quarter to $ 112.5 million. Quarterly operating revenue rose 17.9% to $ 1.54 billion.

For the full year, overall ASKs were up 13.7%. Domestic passenger traffic grew 23.7% and international passenger traffic increased 12.6%. Cargo revenue rose 23.1% as airfreight traffic increased by 11.5%.

LAN Group boarded 17.2 million passengers last year and transported 780,000 tonnes of cargo. For 2012, LAN expects ASKs to grow between 12% and 14%, driven mainly by 13 new aircraft joining the fleet. Cargo ATKs may grow between 7% and 9% as two Boeing 777Fs enter operations in the second half of the year ( ATW Daily News, Nov. 6, 2007 ).

Twelve Airbus A320 family aircraft ( ATW Daily News, Dec. 22, 2010 ), nine 767-300ERs ( ATW Daily News, May 12, 2011 ) and two 787-8s are scheduled to join fleet this year, while three 737-700s on lease are scheduled to be returned. 

LAN continues to move forward with its planned merger with Brazil’s TAM under LATAM Airlines Group ( ATW Daily News, Dec. 23, 2011 ). The combination is expected to be finalized by the end of March. Within the first year after completion of the transaction, pre-tax synergies may reach $ 170 million-$ 200 million ( ATW Daily News, Jan. 16 ).

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