LATAM Airlines Group's merger pains are aggravated by currency woes across multiple markets

Currency pressure in Brazil and Spanish speaking countries continues to create pressure on yields for LATAM Airlines Group during 1Q2014, resulting in a slide in operating revenues and a quarterly loss.

It appears the effects of currency fluctuations could linger for some time, and are just one of the challenges that LATAM faces in the short term. The company is also facing competitive capacity increases in its long-haul markets and fall-off in revenues during the FIFA World Cup held in Brazil in 2Q2014 as corporate travel is expected to decline during that period.

Since LAN and TAM officially closed their merger in 2012 and became LATAM Airlines Group, macro economic conditions in many of the carrier's markets have worsened, adding layers to the existing complexity of combining two carriers. With the short-term challenges likely to linger, achieving a double digit margin performance could shift to a medium-term target.