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LATAM Airlines (LTM) Traffic & Load Factor Plummet in April

Zacks Equity Research

Plagued by the coronavirus-induced receding air-travel demand, LATAM Airlines Group LTM reported lackluster traffic figures for April wherein load factor (% of seats filled by passengers) deteriorated as traffic decline was more than capacity contraction.

With many countries on lockdown and widespread travel bans being imposed, consolidated traffic (measured in revenue passenger kilometers or RPKs) of LATAM Airlines tanked 96.6% on a year-over-year basis. As this Zacks Rank #3 (Hold) company trimmed capacity to balance the bleak demand scenario, consolidated capacity (measured in available seat miles/ASMs) plunged 94.3%. Meanwhile, consolidated load factor dropped 33.3 percentage points to 50%. Passenger count too slumped 96.8%.

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In the first four months of 2020, LATAM Airlines, competing with the likes of Copa Holdings CPA, Azul AZUL and Gol Linhas GOL in the Latin American space, generated RPKs of 29,093 million (down30% year over year) and ASMs of 36,126 million (down 27% year over year). Load factor registered a decrease of 3.4 percentage points year over year to 80.5%. Passenger count at LATAM Airlines too fell 24.9% in the January-April period. Notably, Copa Holdings, Azul and Gol Linhas carry the same Zacks Rank as LATAM Airlines.

With coronavirus affecting air-travel demand, mainly from March onward, shares of LATAM Airlines were down 44.1% in the March-April time frame compared with its industry’s 37% decline.


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