LAN cargo compensates for poor pax figures

CHILEAN airline LAN has reported a slump in group second-quarter (Q2) profits, but cargo figures have rocketed.

Overall, Q2 profit fell 74 per cent to US$15.9 million, hindered by flight disruptions caused by ash from the eruptions at the Puyehue volcano range in southern Chile.

The volcanic eruption, which started on 4 June and interrupted flights as far away as Australia and New Zealand for over a month, cost the airline $18 million during the second quarter.

Analysts expected a Q2 net profit of $33.5 million. Q2 2010 figures stood at $60.6 million net profit.

Cargo earnings gave some hope to the airline, which agreed to merge with Brazil’s TAM to form the region’s top carrier, rising 26.3 per cent to $406.5 million.

The airline also said it raised fleet investment through 2014 to $5.1 billion from a previously announced $4.6 billion. LAN signed a deal in June to buy 20 A320 aircraft from Airbus worth around $1.7 billion for delivery in 2017-2018, as part of its fleet renewal and expansion plan.

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