LATAM Airlines has reported a net profit of $155.3 million for 2017, more than double the figure for 2016.
However, the South American regional carrier missed market expectations amid higher fuel costs. In the fourth quarter, the Chile-based airline made $67.2 million in net profit. This was up 23.6 per cent from the same period in 2016.
Sales at LATAM rose 6.7 per cent last year, tracking a similar rise in passengers. Operating income surged 38.4 per cent in the fourth quarter and 25.8 per cent in 2017.
“The year 2017 will definitely be remembered as one of transformation for LATAM,” the airline said in a statement.
“It was a challenging year for the company, but once again we managed to deliver an improvement in our operating results, met our financial targets and made significant progress on important strategic initiatives.
“Despite the increase in fuel price, LATAM reached the highest operating result in its recent history, and it did so with a fewer number of aircrafts.
“During the year, we successfully prepared to compete in an always-evolving industry, facing new competitors entering our markets, with the biggest transformation in our history: the introduction of a new travel model in our domestic markets.”
LATAM saw operational costs rise 5.5 per cent, while fuel costs jumped 12.7 per cent.
LATAM said its new model for domestic markets, which cover nearly 76 per cent of passengers, aims to build a more competitive and sustainable airline while continuing to stimulate demand and drive the growth of air travel in South America.
“We have fully implemented the new buy on board service and the branded fares model in Chile, Peru, Brazil, Ecuador and Colombia,” the statement added. “In parallel, we continued working on our cost efficiency initiatives, resulting in a contained cost increase during 2017 despite the effect of annual inflation adjustments and non-recurring implementation and fleet redelivery costs.
“Cost control remains one of our top priorities for the coming years, since it is a key element in current competitive markets.”
LATAM was founded in 2012 through a merger of LAN from Chile and TAM of Brazil. In December, oneworld partner Qatar Airways completed an acquisition of ten percent of the company, in a transaction worth $608 million.