Fuel costs create uncertainty for continued profitability of Latin American carriers

Latin American carriers entered 2012 with mixed fortunes as two of its major players, Brazil's Gol and TAM, posted losses for 2011 and started the year off reining in their capacity to bolster a yield recovery that started in 2H2011. A USD52 million loss at LAN's Colombian subsidiary also pressured LAN's overall profits as the group's net income fell 24%. Both Copa and Aeromexico turned strong performances last year, and remain confident of continuing their positive momentum in 2012 as the economies of Panama and Mexico continue to grow. But similar to many previous occasions, fuel costs are ushering in a level of uncertainty surrounding Latin America this year.