Latam Airlines claws back 5 years after losing crown

Bloomberg

It’s taken five years, but the merger that created Latin America’s largest airline might finally be bearing fruit.
Latam Airlines Group SA, once the world’s most valuable carrier, is in its strongest financial condition since predecessor Lan Airlines bought Brazil’s TAM in 2012, said Chief Financial Officer Ramiro Alfonsin. The airline has had to navigate Brazil’s worst recession in history and try to combine two companies with vastly different cultures.
“Now we’re focusing on cutting down the cost of our debt, on competing efficiently with new entrants in the market,” Alfonsin said after the release of Latam Airlines’ second quarter results. “There’s a whole new mindset in the company.”
Investors seem to be in agreement. The American depositary receipts advanced 1.5 percent to $11.94 and yields on its dollar bonds contracted after the carrier reported revenue and earnings before items that beat estimates. Not even the net loss of $138 million—attributed to the weaker Brazilian real and costs from the return of some aircraft as it cuts its fleet—dampened enthusiasm.
The focus is instead on a 20 percent increase in earnings before interest, tax, depreciation, amorti-
sation and rentals, or Ebitdar, and passenger unit revenue growth that was the highest since the first quarter of 2015. Latam is confident it will be in a good position to compete with the new entrants and defend its market share.