LATAM Airlines has published its guidance for 2026 and has approved an interim dividend payment for 2025, as announced on Wednesday (December 3).
With a “focus on sustained profitable growth”, the airline expects capacity to increase 8-10% in 2026. Operating margin is expected to be between 15% and 17%.
For next year, the airline expects an adjusted EBITDA of between $4.2bn and $4.6bn — marking an increasing from this year's guided $4bn to $4.1bn range.
Adjusted unit costs, excluding fuel, for its passenger operations are expected to be between 4.3 and 4.5 cents.
“Looking ahead, we will continue to work on maintaining our execution discipline and cost control," said LATAM Airlines Group CEO Roberto Alvo.
"We will also remain focused on improving the experience of our customers and investing in technologies that simplify their journey and allow the LATAM Group to operate in an even more sustainable manner.”
J.P. Morgan analysts Guilherme Mendes, Julia Orsi, Jamie Baker, and James Kirby said in their report that the guidance implied an “upside” to their expectations. “Thus, we expect a positive market reaction,” they said.
J.P. Morgan had expected LATAM's EBITDA to be $4.1bn, while consensus was around $4.2bn. The analysts had also anticipated capacity to be up 7.5% in 2026.
Domestic capacity in the Brazilian market is expected to grow 6-8%, while domestic capacity in Chilea, Colombia, Ecuador, and Peru is expected to grow 5-7%. International capacity is expected to grow 11-13%.
Revenue is expected to be between $15.5 and $16bn, with operating income at $2.35bn-$2.65bn.
The Chilean airline projected a free cash flow generation of over $1.7bn. Liquidity is guided to be over $5.5bn by the end of 2026. Adjusted net leverage is expected to be at or below 1.4x.
The airline's board also approved a $400 million interim dividend for 2025, to be paid on December 23. This amounts to a dividend of around $0.00069 per share, which will be paid in Chilean pesos.