LATAM cargo revenues go south

Cargo revenues at South America’s LATAM Airlines Group dropped by 26.8% in the final quarter 2015, driven by a 13.4% decline in cargo traffic and a 15.4% decline in cargo yields over the like period in the prior year.
The Chilean-headquartered carrier stated: “During the quarter, cargo demand remained weak, especially in the Brazilian domestic and international market. In addition, connecting cargo traffic in Sao Paulo Guarulhos airport (GRU) was affected by an ongoing strike in customs personnel."
This week saw the Brazilian hub offer new all-cargo operators a 100% landing fee exemption for a year as long as they meet certain criteria. 
Added LATAM: “Pressures on cargo yields continued, mainly as a result of the competitive scenario, the depreciation of local currencies (mainly the Brazilian Real and the Euro), and a lower cargo fuel surcharge related to the drop in fuel prices.
“As a result, cargo revenues per ATK of the fourth quarter declined 24.9% as compared to the same quarter of the previous year.”
It continued: “The company continues working to adjust freighter capacity, while focused on maximizing the belly utilisation of the company’s passenger fleet.
“In the fourth quarter, cargo capacity, as measured in ATKs, declined 2.4%, which includes a 13.3% reduction of the freighter operation.”
The carrier has four B777-200Fs and 11 B767-300Fs in its fleet, although some of the aircraft have been leased to other carriers. In 2015, the LATAM group subleased one Boeing 777 freighter to a third party.
In its full year 2016 guidance, LATAM expects cargo available tonne km (ATK) to be static or decline by 2% as compared to 2015, mainly driven by increased capacity in the bellies of passenger aircraft.
LATAM has signed two different joint business agreements to deepen its partnership with American Airlines Group and IAG (British Airways and Iberia), both members of the oneworld alliance.
It said: “These agreements will improve the connectivity between South America and the United States/Canada and also between South America and Europe, allowing our passengers access to a network of more than 420 destinations. Both agreements are subject to regulatory approval in different countries which could take approximately 12 to 18 months.”