LATAM Airlines Group, buffeted by rising fuel costs and weak currencies, saw its net income decline by 67% to $52.9 million for the third quarter (3Q), compared with the same period last year.

The Santiago-based group reported an operating income of $175 million for the quarter, down 28% year-over-year (YOY), representing an operating margin of 7%, a 2.2 percentage point decline. Total 3Q operating revenue was down 5.8% to $2.5 billion, while expenses dropped 3.5% to 2.3 billion.

This income decline was mainly caused by a $185 million increase in fuel expenses, while the lower revenue was primarily the result of the 24.9% devaluation of the Brazilian real and the 84.6% devaluation of the Argentinian peso, the company said.

“We had a very challenging third quarter for LATAM and for the industry as fuel prices continued to increase,” CFO Ramiro Diego Alfonsin Balza said during an earnings call with analysts.

The group spent $747 million on fuel during the quarter, a 32.9% increase YOY, caused mainly by a 27.7% increase in the average fuel price per gallon, excluding hedge, as well as a 6.3% increase in gallons consumed.

Despite the 3Q fuel cost hike, LATAM’s cost per available seat kilometer (ASK) fell 5.2%, and cost per ASK excluding fuel decreased 16.1%, “reflecting a leaner and more efficient organizational structure,” the company said.

Jack Wittman,