LATAM continues to improve its passenger flow

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LATAM continues to improve its passenger flow
Source: LATAM
November 10, 2022

In September 2022, LATAM operated a total of 142 destinations, equivalent to 98% of what was flown before the pandemic, which was 145 destinations in December 2019, and achieved a positive EBITDAR for the fourth consecutive quarter

Today LATAM released its financial results for the third quarter, reporting its first positive operating result of the year, reaching US$63.1 million in a challenging macroeconomic context and just days after exiting its Chapter 11 process. In turn, it reached for the fourth consecutive quarter a positive EBITDAR (earnings before interest, taxes, amortization and depreciation) reaching US$399.4 million.

“This is a quarter that accompanies the path of recovery. We have achieved better financial results for both passengers and cargo, with a level of total income very much in line with pre-pandemic figures, together with a significant operational recovery. In turn, we recorded a fourth consecutive quarter with a positive EBITDAR. We remain cautiously optimistic for the future by monitoring fuel prices and macroeconomic variables”, said Ramiro Alfonsín, CFO of Grupo LATAM.

LATAM reported a net loss of US$296 million during the quarter, compared to a net income of US$86.3 million in 2019. The losses are mainly due to reorganization expenses of the LATAM Chapter process and costs associated with financing of the DIP.

Operational capacity reached 81% of 2019 levels as of the third quarter, compared to a 72.6% recovery from the second quarter of 2022. Domestic markets achieved close to a 100% recovery compared to pre-pandemic levels; meanwhile, the international and corporate segments experienced a strong increase in recent months.

In September 2022, LATAM operated a total of 142 destinations, equivalent to 98% of what was flown before the pandemic, which was 145 destinations in December 2019.

During the period, operating revenues totaled US$2,587 million, in line with 2019 levels, reaching an increase of 97% versus the same period in 2021.

Meanwhile, operating expenses reached US$2,524 million (+5.3% versus 2019), which is mainly explained by the price of fuel, which increased 88.4% compared to the same quarter of 2019. However, operating expenses, without consider fuel, they are 15.8% reduced compared to the same period of 2019.

It is worth mentioning that on November 3, the group successfully completed its restructuring process in the United States, which it entered voluntarily in May 2020 to reduce its debt, access new sources of financing and transform its business in response to the global pandemic. LATAM emerged from Chapter 11 strengthened with over US$2.2 billion of liquidity (approximately US$1.1 billion in cash plus US$1.1 billion in undrawn revolving lines of credit), US$10.3 billion in additional issued capital and US$6.8 billion in debt.

A notable milestone in the period was the approval of the Joint Venture (JV) between Delta and LATAM that will allow passengers to access more than 300 destinations between the US/Canada and South America (Brazil, Chile, Colombia, Paraguay, Peru and Uruguay). The agreement will make it easier for airlines to increase their level of cooperation in the aforementioned markets, which will translate into a greater number of routes, more and better connections and the strengthening of the benefits of frequent flyer programs.



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