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TAM expecting “better” 2Q2010; LAN traffic up 13.9% for May-2010; Copa traffic also improves


North and South American carriers shares gained on Tuesday (08-Jun-2010) after a late gain in the Dow (+1.3%), on a rise in banking and commodity producers’ stocks. However a gain in oil prices (+0.8%), to USD71.99, offset some gains for airlines.

In Latin America, Brazil’s Bovespa (+1.1%) gained, tracking US stocks and global commodities higher. Stocks were also up on improved economic data for the country, which reported a 9.0% year-on-year expansion in GDP for 1Q2010.  Chile’s IPSA (+0.3%) moved slightly higher, with the retail sector rising on better than expected growth data for the country and inflation data released the day prior, which suggested strong consumer demand.

TAM expecting “better” 2Q2010

Tam Linhas Aereas (+1.2%) CEO, Libano Miranda Barroso, stated during trading that the carrier expects a "better" second quarter result compared with 2009 levels, due to a recovery in demand in Jun-2010. The carrier is expecting traffic growth of 18% in 2010, with an equivalent rate in 2Q2010, as demand receives a boost from the FIFA World Cup. International capacity (ASKs) is expected to increase 10%, exceeded by a 14% increase in capacity (ASKs), as the carrier launches two new routes to Europe in Aug-2010.

See related CAPA Profile: Traffic and Capacity

Also during trading, the carrier announced an order for 20 new A320-family and five A350-900 aircraft, bringing the carrier’s Airbus orders to 176 aircraft, including 134 A320-family, 15 A330-200s and 27 A350 XWB aircraft. The MoU outlining the order was signed during the ILA Air Show in Berlin.

See related CAPA Profile: Fleets

LAN traffic up 13.9% for May-2010

LAN Airlines (+0.8%) also made a marginal gain for the day. The carrier reported a 13.9% year-on-year rise in passenger traffic (RPMs) for May-2010. As a result, the carrier’s load factor increased 2.0 ppts to 74.3%. International passenger traffic accounted for approximately 70% of total passenger traffic.

Domestic passenger traffic in Chile, Argentina, Peru and Ecuador rose 15.2%, as capacity increased 10.1%. As a consequence, the domestic load factor for the month increased 3.3 ppts, to 75.3%.

International passenger traffic for the month grew 13.3%, while capacity increased 11.0%. Accordingly, the international passenger load factor for the month increased 1.5 ppts, to 73.8%. During May-2010, international capacity was mainly driven by an increase in operations on routes to Europe, Mexico and the Caribbean.

Also for May-2010, cargo traffic increased 39.3%. This increase was mainly due to the recovery in imports to Latin America driven by Brazil and the increase in operations to Europe with the B777-200 freighter fleet. In-line with higher demand, capacity grew 30.6%. As a result, the cargo load factor rose 4.4 ppts, to 70.4%.

See related CAPA Profile: American Aviation

Copa traffic also improves

Copa Holdings was flat for the day, despite reporting a 20.9% improvement in traffic (RPKs) for May-2010. Load factor was also up, rising 8.9 ppts, to 72.7%.

North & South America selected airlines daily share price movements (% change): 08-Jun-2010

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