LATAM Airlines report second quarter results

LATAM Airlines has reported second quarter revenues of $3 billion which is up 13.2% when compared to the same financial quarter of 2023. The company’s net income for the period was flat at $146 million, with an operating margin of 9%. Passenger revenue amounted to $2.6 billion, an increase of 14.3% in comparison to the same quarter of 2023. Cargo revenues also increased, rising by 6.9% to a total of $380 million. The airlines consolidated capacity which is measured in available seat kilometres (ASK) saw an increase of 16.2% in comparison to the second financial quarter of 2023. Load factor was at 82.2% during the three months between April and June which is an improvement of 1.8 percentage points compared to the same period of 2023. On an international bases, load factor was at 84.3% while domestic load factor was at 79.8% - a 2.5 percentage point increase in comparison to the second quarter of 2023. “By prioritising efficiency and financial stability, whilst also keeping our clients at the forefront, LATAM has earned a reputation for reliability and effectiveness even when being faced with challenges, and this quarter was no exception,” the company said. The company transported 19.1 million passengers in the period, up 11.7% over last year. The airline commented in its release: ""This growth occurred notwithstanding the impact that LATAM Airlines Brazil faced with the flooding in the state of Rio Grande do Sul, and the suspension of operations at Salgado Filho International Airport in Porto Alegre (POA) in May."" LATAM had an adjusted EBITDAR of $619 million during the quarter due to an increase in capacity and a decrease in unit costs - leading to an adjusted EBITDAR margin of 20.4%. In July, the airline completed a renegotiation of its revolving credit facility (RCF) lines resulting in an extension and increase in both facilities until July 2029. The first RCF which was initially set at $600 million was increased to $800 million. Similarly, the second RCF - initially set at $500 million - was increased to $750 million. This has resulted in LATAM’s total RCF lines now totalling $1.5bn. LATAM generated $177 million in cash during the second quarter, excluding the dividend payment of $175 million made in May. Net of the dividend payment, the cash balance remained stable. The group ended the quarter with a liquidity position of $3bn.