Macroeconomic weakness drags down LATAM Airlines Group’s 2Q2014 results and could linger into 2015

Just as LATAM Airlines Group reached a turnaround in the Brazilian domestic market, macroeconomic weakness began to take hold throughout South America, which pressured the company's 2Q2014 results.

LATAM also faced headwinds triggered by the FIFA World Cup soccer tournament held in Brazil during Jun-2014 and Jul-2014 as typical demand patterns were upset by many Brazilians opting to remain home for the matches, along with a decrease in corporate demand.

Although the knock on effects of soft demand from the World Cup are temporary, LATAM's challenges in other markets could linger at least for the short term. Given the overall weaker conditions in most of the company's geographies, its aspirations of achieving investment grade status may not materialise until CY2016 at the earliest, about four years after the merging of LAN and TAM to create LATAM Airlines Group.