Santiago-based LATAM Airlines Group has reported a 2013 net loss of $281.1 million, a $242 million improvement over 2012’s net loss of $523.1 million. LATAM’s 2013 revenue rose 0.3% to $13.3 billion as expenses fell 3.9% to $12.6 billion, producing an operating profit for the year of $643.9 million, more than seven times the operating profit of $91.4 million LATAM reported for 2012.

Full-year system yield was down1.8% to 8.4 cents as RASK stayed steady year-over-year at 6.1 cents and CASK dropped 3.7% to 6.2 cents. LATAM’s fuel expenses for 2013 were $4.4 billion, down 7.7% from 2012; 1.27 billion fuel gallons were consumed by the company in 2013, down 2.2% from 2012.

LATAM’s 2013 passenger traffic increased 2.5% to 106.5 billion RPKs on a 0.4% decrease in capacity to 131.7 billion ASKs, generating a load factor of 80.8%, down 2.3 points from 2012. Total passengers transported in 2013 came to 66.7 million, up 3.1% from 2012.

In the 2013 fourth-quarter, LATAM posted a net loss of $46.2 million, a $23.7 million improvement on the $69.8 million loss posted in 2012’s December quarter. Fourth-quarter revenue dropped 2.1% year-over-year $3.4 billion; expenses fell 6.5% year-over-year to $3.2 billion, leaving an operating profit of $234.9 million, nearly tripling the company’s operating profit from the 2012 fourth-quarter.

LATAM explains the net results as “mainly due to a foreign exchange loss of $142.6 million mostly recognized at TAM as a result of the 6.5% devaluation of the Brazilian real during the quarter.”

LATAM was formed in June 2012 as a merger of Chile’s LAN Airlines and Brazil’s TAM Airlines. Each airline continues to operate under its own brand and identity.

Earlier in 2013, after reviewing its post-merger plan, LATAM began a restructuring aimed at reducing its total operating fleet. The company started phasing out all of its Airbus A330s, A340s, Boeing 737s, and Bombardier Dash 8-200s and Q400s during the 2013 fourth quarter, a process that will continue through early 2016.

“During the fourth quarter of 2013 this process has generated non-recurring costs of $17.5 million resulting from penalties related to anticipated redeliveries and other delivery expenses,” the company said in a statement. “For the full year, these costs reached $29 million.”

LATAM took delivery of four Airbus A320s and one Boeing 787-8 Dreamliner during the fourth quarter and returned one each of its A319s, A320s, A340s and 737s. Additionally, the company sold an A318 during the quarter. During 2014 the company expects “to phase out all of our remaining 737s, Q400s and A340-500s, and will also redeliver one of four remaining A340-300s and seven of our 20 A330s,” LATAM said in a statement.

Following this fleet restructuring, LATAM will no longer operate turboprop aircraft in Colombia. By the end of 2015, the company’s long-haul business is expected to be centered on a fleet of 38 767-300s, 10 777-300 ERs, 17 787s and an Airbus A350-900 (due for delivery to LATAM in the 2015 fourth quarter).

As of Dec.31, LATAM’s fleet consisted of 323 passenger aircraft and 16 cargo aircraft.