Santiago-based LATAM Airlines Group plans to revive domestic capacity growth in its Spanish-speaking country (SSC) affiliates in 2018, projecting a 6%-8% rise in ASK growth for the sector following a [0%] halt in capacity growth during 2017. The company made its projections in preliminary guidance for 2018 released Jan. 5

The South American airline group—which comprises LATAM Airlines and its affiliates in Argentina, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru and LATAM Cargo—estimates the group will see 5%-7% company-wide capacity growth for full-year 2018, up significantly over the 1% capacity growth the company maintained in 2017.

The company is estimating its full-year 2018 operating margin will be in the 7.5%-9.5% range, a 1.5 point rise over the company’s projected 2017 operating margin range of 6%-8%.

LATAM’s international capacity will grow an estimated 6%-8%, a 3 point rise from 4% growth in 2017. Brazilian domestic capacity is predicted to grow 2%-4%, a turnaround from a 4% decrease in 2017.

For combined passenger and cargo capacity, LATAM estimates 1%-3% growth in 2018, rebounding somewhat from a 7% decline in 2017.

LATAM clarified its 2018 guidance assumes an average Brazilian Real/US dollar exchange rate of BRL3.31/$1 and an average jet fuel price of $73/bbl.

The group will review its guidance on a quarterly basis to incorporate any noteworthy changes in macroeconomic variables or operating performance.

LATAM is expected to release its full-year 2017 financial and operating results in March.

Mark Nensel