LATAM Airlines , Latin America’s largest airline, reported a wider-than-forecast net loss in the second quarter of $92 million, as it struggles to overcome tough economic conditions in its key markets.
Analysts had expected a $20 million loss, according to a Reuters forecast. The airline made a loss of $50 million in the same period a year ago, a quarter that is traditionally weak for seasonal reasons.
Sales for the second three months of 2016 were $2.1 billion, down from $2.4 billion a year ago. In the first six months, the airline made a $10 million profit.
LATAM has racked up repeated losses since it was formed in the 2012 merger of Chile’s LAN and Brazil’s TAM, hamstrung by Brazil’s economic problems and negative currency effects.
It has said that any recovery in its bottom line will depend on a turnaround in Brazil, currently mired in deep recession.
The macroeconomic environment remained “challenging”, the company said on Thursday.
“There is a pressure on tariffs, that is impacting results,” said investor relations manager Gisela Escobar at a post-earnings presentation.
“We have seen more competition on international routes in recent months.”
LATAM has continued to cut capacity out of and within Brazil, shifting towards more stable and lucrative international routes, and building up Lima as a hub.
Acknowledging that results “had not fully met our expectations”, the company said it was looking to increase innovation and “ancillary revenues” and cut costs in order to make domestic operations sustainable in the long-term.
The airline maintained its margin guidance of 4.5 percent to 6.5 percent for 2016, and said previously announced fleet reductions were proceeding in line with plans.