TAM hoping to strengthen presence in Asia; LAN to expand fleet; reports improved net profit

The majority of North and South American carriers shares were up again on Thursday (29-Apr-2010), boosted by another day of gains in the wider market. The Dow (+1.1%) rose on improved 1Q2010 earnings results from a number of companies and reports Greece is close to a bailout deal.

The AMEX Airline Index (+1.5%) moved higher as a result. The gain was despite a 0.9% increase in oil prices, to USD83.22.

TAM hoping to strengthen presence in Asia

Both TAM (+3.9%) and GOL (+3.7%) gained on Thursday, pushed higher by a 2.0% rise in the Brazilian Bovespa index.

TAM this week announced plans to open a representation office in Tokyo on 27-Apr-2010, as part of plans to strengthen its presence in the Asian market. The airline will work through a GSA. The carrier already has representative offices in Asia in South Korea, Hong Kong, Thailand and Taiwan, with plans to establish a representative in India in May-2010.

LAN planning to expand fleet; reports improved net profit for 1Q2010

LAN Airlines (+2.4%) was also up after announcing plans during trading to invest USD2.8 billion to increase its fleet up to 2013. The carrier has a USD5.9 billion investment plan for until 2018, which includes increasing its fleet from 96 aircraft in 2009, to 176 in 2018. Under the plan, LAN plans to purchase 26 B787-800 Dreamliner aircraft and lease a further six. The carrier plans to take delivery of two B787-8s in 2011, three in 2012 and five in 2013. The aircraft will be based in Santiago and operate US and Europe routes.

Also this week, LAN reported a 35.8% year-on-year rise in net profit for the three months ended 31-Mar-2010, to USD88.3 million. Operating profit also rose, up 21.0%, to USD142.9 million, as a 17.3% rise in operating revenue outweighed the 16.7% rise in operating costs, to USD1,035 million and USD892.0 million, respectively.

LAN stated it lost USD2.6 million on hedging in 1Q2010, compared with a USD57.9 million loss in 1Q2009, with the carrier adding that it also witnessed a strong recovery in passenger and cargo business in the quarter.

In terms of traffic for the quarter, the carrier reported a 7.9% improvement in passenger numbers, to 4.1 million. Load factor rose 1.4 ppts, to 79.3%. As a result, passenger yield rose 6.6% for the period, to USD 9.1 cents.

Considering current market conditions, the carrier stated it maintains its expectations for 2010 with passenger ASK growth of approximately 10% in 2010. Growth in the passenger business during 2010 is expected to mainly be driven by international and regional markets.

LAN Cargo currently expects approximately 16%-18% growth in cargo capacity for 2010, mainly driven by higher utilisation of the freighter fleet, especially the two B777-200 freighters received in the first half of 2009.

Elsewhere, Copa Holdings (+0.9%) stock also rose.

Also featured in today’s issue of America Airline Daily:

North & South America selected airlines daily share price movements (% change): 29-Apr-2010