The LATAM Group has released its consolidated financial results for the second quarter of the year, which show a gradual improvement in the operation, with a capacity (measured in ASK) of 72.6% higher than levels in 2019 and 135.2% higher than that of the same quarter in 2021.
This rise in capacity is mostly attributable to the health of the domestic markets in Brazil, Colombia, and Ecuador as well as the improvement in global operations. It also occurs during a period of rapidly rising fuel prices.
The group’s overall operational sales for the time period were US$2.226 billion, which was 6.1% less than in 2019 but represented a 150.5% rise over 2018.
Consequently, total operating costs climbed by 3.5% when compared to the same quarter in 2019, driven by a 31.5% increase in the cost of fuel during the quarter.
The LATAM region posted losses of US$523.2 million at the end of the second quarter.
“We have concluded a second quarter with great progress in our restructuring process under Chapter 11 and we intend to escape from it during the last quarter of this year,” said Roberto Alvo, CEO of LATAM Airlines Group.
Despite the fact that the firm has made progress in its operational recovery, we are nevertheless cautiously hopeful about the upcoming months and will be closely watching fuel prices and macroeconomic indicators because the industry is still operating in a very unstable environment.
LATAM Group won the United States Bankruptcy Court’s approval of its Reorganization Plan at this time, and it also arranged for its departure finance.
With the support of the overwhelming majority of shareholders, or 99.8% of the shares present or represented at the Meeting, or 77.5% of the total shares with voting rights, LATAM received the necessary approval from its shareholders at the Extraordinary Shareholders’ Meeting for the company’s new capital structure and the issuance of the financing instruments presented in the Plan. This enables LATAM to start the final stage of regulatory requirements.
With the submission of the request for registration of the instruments before the Commission for the Financial Market (CMF) on July 8, LATAM has already started the process of registering the Plan’s instruments in Chile.
LATAM declared in April that it will prioritize South American production in order to use 5% renewable fuel by 2030, with the goal of becoming carbon neutral by 2050.
Additionally, the organization declared in July that it will look into possibilities for CO2 removal using the Direct Air Carbon Capture and Storage System (DACCS). After agreeing to a letter of intent with Airbus, this announcement was jointly made with other market participants.
Regarding the circular economy, the “Recycle your Trip” program—which involves sorting the waste produced on board and was already operational on the domestic flights of the affiliates in Chile and Ecuador—was implemented during the quarter in the Peruvian subsidiary and later in the Colombian subsidiary.