TAM returns to profit but reports declining EBIT

TAM returned to profit in 2009, reporting a BRL435.7 million ($241.9 million) surplus under IFRS that compared to a BRL1.43 billion loss in 2008 fueled by nonoperating items.

Full-year operating revenue fell 7.1% to BRL9.77 billion, driven by a 9.1% decline in ticket sales to BRL9.09 billion. Expenses were cut 3.6% to BRL9.6 billion, resulting in a 69.6% plunge in EBIT to BRL169.7 million from the BRL558.9 million earned in 2008. Fuel hedges and losses on foreign currency fluctuations largely were responsible for the company's 2008 net loss (ATWOnline, April 1, 2009).

The Brazilian flag carrier transported 30.4 million passengers last year, up 0.9%, and flew 44.15 billion RPKs, up 9%. Capacity climbed 13.4% to 64.72 billion ASKs, lowering load factor 2.8 points to 68.2%. Its domestic market share slipped 4.8 points to 45.6% and its international share soared 11.2 points to 86.5%. Unit revenue plunged 18.1% to BRL0.151 and yield was down 6.9% to BRL0.23. Unit cost was cut 15% to BRL0.148 but rose 0.3% to BRL0.106 excluding fuel.

TAM ended the year with 132 aircraft (21 A319s, 81 A320s, five A321s, 16 A330s, two A340s, three 767s and four 777s). It plans to operate 148 by the end of 2010 (five ATR 42s from recently acquired Pantanal Linhas Aereas, 25 A319s, 84 A320s, seven A321s, 18 A330s, two A340s, three 767s and four 777s) and expects to increase its fleet to 155 by the end of 2011. At the start of 2015 it is scheduled to operate 165 aircraft.

Fourth-quarter net loss of BRL334.1 million was narrowed 73% from a BRL1.24 billion deficit in the final three months of 2008. Revenue dropped 13.9% to BRL2.5 billion and EBIT fell 41.1% to BRL126.2 million.

TAM expects domestic RPKs to increase 14%-16% in 2010 and said January-February demand soared 36% year-over-year. It plans to raise capacity 12% this year and add two destinations and expects a load factor of 69%. It is targeting a 6% cut in unit cost excluding fuel.