LAN not hurt by surging peso: CFO
LAN Airlines CFO Alejandro de la Fuente stated the airline is protected from a soaring Chilean peso, which is is trading at a three-year high against the greenback, by a natural hedge (MarketWatch, 29-Apr-2011). The CFO said that the stronger local currency means local costs rise but passenger traffic tends to increase as consumers' purchasing power expands and demand for goods from offshore increases, which benefits the airline’s strong cargo arm, LAN Cargo. The peso’s appreciation has hurt local exporters, however, which may neutralise any inbound cargo benefits. Mr de la Fuente reiterated LAN's forecast for 16% to 18% growth in passenger traffic this year, a downward revision from an earlier forecast 20% to 22% growth as high crude oil prices have forced the airline's to suspend certain routes.