In the midst of the worst crisis ever suffered by the world’s commercial aviation industry, combined with the impact of Argentina’s economic crisis, LanChile posted US$10.8 million in profits in 2001.
These positive results reflect the company’s ability to adjust operations and cost structures quickly and effectively to minimize impacts from the significant drop in demand.
(*) Lan Chile S.A. (“LanChile” or “the Company”) (NYSE: LFL), Chile’s largest domestic and international passenger and air cargo carrier, today announced its audited and consolidated financial results for the fourth quarter and full year 2001. All figures were prepared in accordance with generally accepted accounting principles in Chile and are expressed in millions of U.S. dollars.
H I G H L I G H T S
* For the fourth quarter, despite decreased demand resulting from the terrorist attacks and the Argentine economic crisis, which together caused an estimated $57 million loss in passenger and cargo revenues, LanChile earned $8.7 million in operating income with a loss of $4.8 million (-$0.01 EPS) in net income.
* For the full year 2001, LanChile earned $50.3 million in operating income and $10.8 million in net income ($0.03 EPS).
* Excluding all extraordinary items, the Company reported a $1.8 million net loss in the fourth quarter and $13.0 million in net income for the full year.
* In October and November, LanChile reduced operations by 10% and dismissed 7.5% of its employees, responding to weak passenger demand following the September terrorist attacks.
* On October 15th, the Company signed a new five-year contract with 147 pilots originally in the LanChile Pilot Union who chose to negotiate as a new separate group of pilots.
* On October 22nd, as part of its restructuring plan, the Company took the first major step in forming the new LanCargo Group by changing the name of Ladeco S.A. to LanChile Cargo S.A.
* On October 28th, the Company launched “LanExpress”, a new brand and travel concept that will completely replace the previous Ladeco brand.
* On November 28th, the Company signed a new four-year collective agreement with the remaining 111 pilots who form the LanChile Pilot Union.
* On December 6th, LanChile acquired a 73.3% stake in ABSA for $2.1 million.
* On January 16th, Fitch assigned LanChile a “BBB-” Investment Grade credit rating.
* On January 21st, the CEOs of oneworld reemphasized their commitment to the alliance.