MercoPress. South Atlantic News Agency

Fuel costs hit Lan profits in spite of more activity

Lan net profits in the third quarter 2005 reached 23,8 million US dollars, a 35% drop compared to the same period in 2004, according to the Chilean flag carrier latest release.

In the first nine months of this year, profits totalled 96,7 million US dollars, compared to 116 million US dollars in the same period last year. Lan blames the contraction on higher international fuel costs.

"Profits suffered the impact of 54 million US dollars additional costs, as a consequence of higher fuel prices and costs associated to the launching of the Lan operation in Argentina", said the company.

However overall sales increased 17,6% reaching 622 million US dollars in the third quarter, spurred by a greater passenger and cargo traffic.

According to the latest report from the Chilean Civil Aviation Agency, international air traffic in Chile during the first nine months of the year increased 10,3%, reaching 2.990219 passengers. September was particularly active with a 17% expansion.

Carriers with over 100.000 passengers in the nine months period include: Lan, Aerolineas Argentinas, Varig and American Airlines which together make up 71,6% of the market.

Most popular destinations are Buenos Aires, Sao Paulo, Madrid, Lima and Miami, all with over 90.000 passengers.

Regarding the domestic market September shows a 10% growth, over the same month 2004, with 256.860 passengers totalling 2,313,496 in nine months, 7,1% expansion.

Sky Airlines has 18,7% of the Chilean domestic market and Aerolineas del Sur, 5,5%. However if only the routes they operate are considered, their share reaches 21,7% and 11,2%.

International cargo during September experienced a slight increase, 1,6% with 18,435 tons, with Lan taking the lion's share, 57%.

Regarding domestic cargo September shows a 0,7% increase over the same month in 2004 and 1,8% in the last nine months.

Santiago-Punta Arenas with 16,1% of volume is the main domestic cargo route followed by Santiago Iquique 15,7%; Santiago Antofagasta 15,5% and Santiago-Easter island, 10,1%.