SANTIAGO, Sept 22 (Reuters) - The passenger volume of carrier LATAM Airlines rose 2.3 percent year-over-year in August, the company said late on Thursday, potentially marking a turning point for demand in Brazil, the largest market for the Santiago-based company.
LATAM , Latin America's largest airline, said Brazilian domestic volume rose 3.4 percent in August, the first positive reading after two years of contraction in a sign of economic recovery after a long recession. In the year through August, Brazil's passenger volumes were down 6.2 percent.
The airline's shares on the Santiago stock exchange rallied on the news, rising 0.9 percent to 8,997 CLP ($14.41) as of 12:11 p.m. local time (1511 GMT) after earlier surging to 9,020 pesos($14.47), the highest level this year.
"We're seeing growth in the Brazilian market, which contrasts with the decline accumulated up until now, indicating a modest recovery," Santiago brokerage Bci said in a note on Friday.
Last month, a LATAM executive had told investors the company remained "very cautious" on the outlook for Brazilian demand despite the incipient economic recovery.
Domestic traffic in the airline's other major markets, including Argentina, Chile, Colombia, Ecuador and Peru, grew just 1.5 percent in August.
$1 = 623.4300 Chilean pesos Reporting by Antonio de la Jara; Writing by Luc Cohen; Editing by Bernadette Baum