LATAM continues to show operational recovery

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LATAM continues to show operational recovery
Source: Newlink
May 12, 2022

In the first quarter the group's consolidated capacity (measured in ASKs) reached 68.2% of 2019 levels and an increase of 89.7% compared to the first quarter of 2021

Despite a challenging first quarter after the appearance of the Omicron variant of Covid-19 and the significant increase in fuel prices, LATAM has continued to improve its performance at the operational level and reduce its CASK (cost per ASK) ex-fuel . In the period, the group's consolidated capacity (measured in ASKs) reached 68.2% of 2019 levels and an increase of 89.7% compared to the first quarter of 2021, a result that was mainly driven by the domestic operations of the subsidiaries.

Total revenues amounted to US$1,959 million during the period, 22.4% below 2019 levels, but had an increase of 114.5% compared to the first quarter of 2021. While passenger revenues fell 31.4% compared to the In 2019 (+199.1% vs. 1Q21), the operations of LATAM's cargo subsidiaries maintained a solid performance, with revenues of US$430.7 million, which represents an increase of 63.5% compared to the same period in 2019.

Total costs were US$2,097.2 million, which represents a decrease of 14.2% compared to 2019. In particular, CASK ex-fuel improved 6.8% compared to the fourth quarter of last year, going from US$5.6 cents to US$5.2 cents. , which also represents an improvement of 29.3% compared to the first quarter of 2021. The above results are explained in the framework of the cost reduction measures implemented by the group since the beginning of the reorganization process and that will translate into savings for more than US$900 million annually.

However, during the quarter, there was a significant increase in the average price of fuel that reached US$3.25 per gallon (excluding hedges), an increase of 75.8% against the same period last year and even 29.9% over the quarter. quarter of 2021. This rise is largely due to the conflict in Ukraine.

Roberto Alvo, CEO of LATAM Airlines Group, commented that "we have had a significant improvement in our results compared to the same period in 2021 in an environment that continues to be challenging." He added that "we remain cautiously optimistic going forward, as while we have seen a healthy recovery in passenger demand, the continued rise in fuel prices is a variable we watch closely."

El resultado operacional alcanzó pérdidas por US$138.2 millones, mientras que el resultado de última línea fue de pérdidas por US$380.1 millones, que se compara con una pérdida neta de US$60.1 millones en el mismo período de 2019 y una pérdida de US$430.9 millones durante el primer trimestre del año anterior.

Regarding Chapter 11, on May 6, 2022, LATAM reported the results of the vote on its Reorganization Plan, which reached sufficient support of approximately 82% in dollars and approximately 65% ​​of the number of creditor voters of the classes affected by the plan. These results do not include RCF claim holders, who still have until May 10, 2022 to vote. This after the approval by the US Court of the Disclosure Statement on March 21, 2021, which allowed the Debtors to start the voting solicitation process. The Plan Confirmation Hearing is scheduled to take place on May 17 and 18, 2022, as established by the US Court.

Advances in sustainability

In relation to the group's sustainability agenda, during the quarter LATAM launched "Friday Fly Neutral", an initiative that offsets the emissions of emblematic routes on Fridays, supporting the protection of strategic ecosystems in the region. In turn, the group incorporated a new sustainable Eco kit in the business cabin and the plastic bags of headphones, blankets and pillows were replaced by reusable materials.

To support the response to humanitarian crises worldwide, the LATAM Solidarity Plane program made available to the UN Refugee Agency (UNHCR) free passenger and cargo transport to help people who have had to leave their homes in search of safety and protection. In addition, it added two new alliances: the Fundación Cardioinfantil in Colombia and the Foundations Committee of the Global Initiative to Fight Childhood Cancer in Peru.


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