SAO PAULO (Reuters) - Chilean airline LATAM (SN:LTM) will fire some 1,200 airport-based employees in Brazil and replace them with workers from a services company in an apparent cost-cutting measure, according to a report in O Estado de S. Paulo on Wednesday.
The report said the airline confirmed the firings but would not give an exact number. A LATAM Airlines spokesman did not immediately respond to a request for comment.
However, the union representing LATAM employees posted news of the firings on its website on Wednesday, saying employee terminations would become effective next week. A representative for the union said its president was not immediately available for comment.
LATAM has been struggling in recent years, following a merger with Brazilian airline TAM in 2012 that has yet to boost profits and due to increasing competition in South American markets that has pushed the airline to pursue a low-cost model for its domestic flights.
Regional airlines have also faced rising fuel prices and weakening local currencies, particularly the Brazilian real and the Argentine peso.
LATAM posted a net loss of $114 million in its most recent quarter, in line with its biggest competitors in South America. Brazilian airlines Azul SA (N:AZUL) and Gol Linhas Aereas Inteligentes SA (SA:GOLL4), as well as Colombia's Avianca Holdings S.A (CN:AVT_p), all posted net losses in the same period.