Brazil airline TAM posts record quarterly profit
SAO PAULO, Brazil, May 5 (Reuters) - Brazil's leading Airline, TAM Linhas Aereas (TAMM4.SA: Quote, Profile, Research), posted a record quarterly profit on Friday as it carried more passengers and kept a lid on costs.
The Sao Paulo-based carrier made a net profit of 111.2 million reais ($53.98 million) in the first quarter, up from 53.5 million reais in the year-earlier period and 65.3 million reais in the fourth quarter of 2005.
Under U.S. GAAP accounting rules, TAM's quarterly profit reached 268 million reais, a 283 percent increase over the same period in 2005.
TAM, which was founded in 1961 as a small cargo carrier, said an increase in passenger traffic and a new electronic ticketing system helped it keep a lid on costs, bolstering its bottom line.
Net revenue jumped 24.6 percent in the quarter from a year ago, to 1.66 billion reais, with 1.26 billion reais coming from TAM's domestic routes and 317.9 million reais coming from its international flights.
TAM's strong performance contrasts starkly with that of Brazil's unofficial flag carrier, Varig (VAGV4.SA: Quote, Profile, Research), which is saddled with some $3.3 billion in debt and is struggling to stave off collapse.
TAM carried 5.55 million passengers in the first quarter, up from 4.22 million in the year-ago period and 5.4 million in the fourth quarter. Its load factor, or occupancy rate, rose to 72.6 percent from 69.9 percent in the first quarter of 2005.
TAM finished the quarter with the top spot in Brazil's aviation market, with 43.8 percent, up from 40.1 percent a year earlier but down from 46.1 percent at the end of December. Gol Linhas Aereas Inteligentes (GOL.N: Quote, Profile, Research)(GOLL4.SA: Quote, Profile, Research), a fast-growing low-cost carrier, remained in second place, followed by Varig.
On the operating level, earnings before interest, taxes, depreciation and amortization, a measure of cash flow known as EBITDA, rose to 375.5 million reais from 295.2 million reais a year ago.
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