LATAM Airlines Group’s earnings rebounded in the third quarter, as the company’s moves to trim international capacity helped produce its first quarterly net profit of 2019.

Group-wide net income totaled $86.3 million for the third quarter, up 21.8% from the year-earlier period. The results were a marked improvement from the first two quarters in 2019, when LATAM posted a combined $123 million net loss on weak international demand.

“This improvement reflects a proactive capacity management across our international markets and a healthy domestic demand. Capacity adjustments in our international markets are bearing results, especially to the US,” LATAM CFO Ramiro Balza said on the company’s 3Q earnings call.

International capacity fell by 4% from the previous quarter, driven by a 20% reduction in international capacity to Argentina in 2Q. Domestic Brazil capacity, meanwhile, grew by 9.8% year-over-year, as the company assumed slots and leased aircraft previously operated by the now-defunct Avianca Brazil. Domestic capacity for Spanish-speaking countries including Chile, Peru and Colombia advanced 9.5%, while total revenues for the countries declined 10% because of currency depreciation.

With regard to LATAM’s agreement to sell a 20% minority stake to Atlanta-based Delta Air Lines, LATAM SVP-corporate finance Andres Eitel said Delta has submitted its HSR notification with US authorities and is awaiting a response before launching the tender offer. He also said LATAM has received $150 million of the $350 million in transition costs pledged by Delta as part of the transaction.

Eitel confirmed LATAM’s plan to sell four Airbus A350s to Delta at the end of 2020 and to transfer over 10 more A350s currently on firm order for delivery between 2021 and 2025.

“We are currently working to execute the transition as seamless as possible for passengers, getting ready with our commercial agreement with Delta that will replace the existing agreement with American Airlines,” Eitel said.

LATAM added six Airbus A320s, two A320neos and one A350 in 3Q, ending the quarter with 318 aircraft in its in-service fleet, according to Aviation Week Fleet Data Services. The company plans to have 330 aircraft in its total operating fleet by the end of this year and 338 by the end of 2020.

Total revenue increased 6.9% year-over-year to $2.6 billion, driven on an 11% growth in passenger revenues. Unit revenue, measured in RASK, grew by 9%, while nonfuel unit costs rose by 8.2%, largely because of hyperinflation in Argentina.

Ben Goldstein,