LATAM Airlines Group makes strategic moves to bolster network strength as regional dynamics change

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LATAM Airlines group has made numerous network changes during the last year-and a-half, adding 25 new routes and canceling 15. The moves are designed to leverage the company’s positions of strength, and connect some secondary international cities to its hubs in Lima and Santiago, capitalising on new opportunities to Argentina and upping competition in some of its domestic markets.

As market conditions in Latin America remain fluid, LATAM has adjusted its capacity projections for certain regions, issuing a downward revisions for domestic Brazil and domestic Spanish speaking markets while upping its ASK deployment for international markets. Despite the downward revision in capacity, LATAM is launching several point-to-point routes within Brazil, Colombia, Chile and Peru during 2017 and 2018, opting to become more aggressive in those markets as competition from new and existing low cost competitors becomes more intense.

LATAM remains cautious about the overall operating environment, but its revenue trends continue to stabilise as 2Q2017 marked the third consecutive quarter of positive passenger unit revenue growth driven partly by appreciating currencies in its operating and largely from its capacity management during the last couple of years.

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