The LATAM Group reported a robust 20.2% increase in total operational revenues for Q2 2023, reaching $2.676 billion USD. This significant upswing was primarily driven by a 32.9% boost in passenger revenues, which compensated for a 23.2% decline in cargo revenues.
«In the second quarter, LATAM’s passenger revenues rose to $2.278 billion USD, reflecting a healthy 32.9% increase compared to the same period in 2022,» the company reported. This considerable increase was attributed to a 28.4% upsurge in operations, largely fueled by the continued recovery of international operations and a strong demand and yield environment.
Despite a decrease in cargo revenues due to increased capacity and reduced demand heading towards South America, LATAM’s cargo revenues were still 32% higher compared to the same period in 2019. The company also reported a strong consolidated load factor of 80.4% for the quarter, highlighting its effective capacity utilization.
In the first half of 2023, the total revenue reached $5.482 billion USD, marking a 31.0% increase over the same period in 2022. Notably, passenger and cargo revenues accounted for 85.2% and 13.4% of total operational revenues, respectively.
Despite the positive revenue growth, LATAM’s adjusted operational costs were $2.405 billion USD, showing a slight increase of 2.8% compared to the previous year. The company cited increasing passenger operations, exchange rate variations, and inflationary pressure as the primary contributors to this uptick. However, these factors were partially offset by decreased fuel costs and successful cost-saving initiatives across all areas.
«During the quarter, the LATAM Group reported an ex-fuel CASK per passenger of $4.3 cents, a decrease of 10.4% compared to the same period in 2022,» the group stated. It credited this reduction to efficient operational strategies, alongside a favorable environment marked by a substantial 29% decrease in average fuel price during the quarter.
Reflecting the company’s resilience, LATAM reported a net profit of $145 million USD for the quarter. Additionally, LATAM generated $110 million USD in cash, with liquidity rising to $2.6 billion USD. The leverage ratio, a key indicator of financial stability, stood at a healthy 2.4x, demonstrating the company’s strong capital structure following its Chapter 11 reorganization process.
The group’s financial debt stood at $4.1 billion USD, a decrease of 2.4% from the previous quarter. As of the end of the period, LATAM reported a gross debt of $6.4 billion USD, while its net financial debt was $4.9 billion USD.
Roberto Alvo, CEO of LATAM Airlines Group, stated, «LATAM has been working systematically and with a long-term view. Our financial results are the fruit of a combination of effective commercial strategy, an attractive value proposition for customers, disciplined costs, a robust network in the region, worldwide leading punctuality, and a strong balance sheet.»
The quarter was particularly active in terms of network expansion. LATAM Airlines Peru announced new routes such as Lima-Aruba and Lima-Caracas. New routes were also announced under the Joint Venture Agreement with Delta, expanding the airlines’ networks and offering improved connectivity between North America and South America.
Additionally, LATAM Airlines Brazil announced a new interline agreement with South African airline, Airlink, providing passengers access to over 40 destinations across Africa starting from September 2.
