Airline Revenue To Latin America Nosedive

News Americas, NEW YORK, NY, Fri. Aug. 5, 2011: Airlines flying to Latin America actually are losing money, the International Air Transport Association has confirmed.
For the first time in two years, revenue of carriers flying to Latin America, as well as North America and the Asia-Pacific region, dropped.

The IATA blames it on rising fuel costs rose and capacity increases that outstripped demand.

Disruptions following Chile’s Puyehue Volcano eruption contributed to a drop from the 21.3 in Latin America. Still overall demand for international passenger services grew by 5.9 percent while load factors for the LATAM region rose to 77.3 percent (from 73.8 percent in June 2010) which will help the region’s carriers deal with higher fuel costs.

Jet fuel prices headed above $130 a barrel in July, IATA said yesterday, and though passenger traffic is still rising at a 4 to 5 percent annual rate, capacity increases are outpacing demand, resulting in June load factors, or seat-occupancy levels, that were 1 percentage point below 2010’s high.

Early figures for 16 carriers showed operating profit shrinking by one-third and net income tumbling by almost two- thirds.