LATAM announced today its financial results for the fourth quarter and the full year 2023, demonstrating a solid financial and operational performance during said period with US$582 million in net income.
For the full year 2023, LATAM reported revenues of US$11.8 billion, 23.9% more than in 2022 and reached an adjusted operating margin of 11.3%. In the fourth quarter of 2023, the group achieved revenues of US$3.3 billion, 18.5% more than the same period of the previous year, mainly explained by the sustained growth of passenger revenues, which increased by 24.3% compared to the fourth quarter of 2022.
Regarding its capital structure, LATAM closed 2023 with US$2.8 billion of liquidity, as a result of US$498 million of cash generation during the last twelve months, which allowed it to achieve a net leverage of 2.1 times, the lowest in its history.
“This performance is a reflection of a culture where we prioritize the customer, work to deliver better service, maintain a competitive cost structure, incorporate innovation and technology, strive for a sustainable business, and contribute to the societies where LATAM group companies operate. This focus enables us to deliver a better product, which has translated into very good financial results”, said Roberto Alvo, CEO of LATAM Airlines Group.
As well, the CFO of LATAM Airlines Group, Ramiro Alfonsín added that “these figures reflect the good operational performance and LATAM’s current financial strength. LATAM group transported nearly 74 million passengers, reaching levels similar to 2019, prior to the pandemic. And as a result, 2023 closed with US$2.5 billion of adjusted EBITDAR, exceeding the 2023 guidance projections and the updated business plan published in August 2022.”
Last December, LATAM presented its guidance for 2024, with operational and financial projections, expecting a growth in its passenger operations between 12% and 14% (measured in available seat kilometers – ASK), and projecting to surpass 2019 ASK levels during the first quarter of 2024. Additionally, LATAM forecasts adjusted EBITDAR (earnings before interest, taxes, depreciation and amortization and rent costs) between US$2.6 billion and US$2.9 billion, and a ratio of adjusted net leverage between 1.8 and 2.0 times.
Operational recovery
During the year, the group transported nearly 74 million passengers, reaching levels similar to 2019, prior to the pandemic. This result is explained by the increase in passengers transported in the domestic markets of the LATAM group affiliates in Chile, Brazil, Colombia, Ecuador and Peru, and a strong increase of 50.1% in international passengers transported compared to 2022.
In the fourth quarter, the group’s consolidated operations, measured in available seat kilometers (ASK), increased 14.7% compared to the same quarter in 2022 (representing a 95.5% recovery versus 2019 levels). During 2023, the group increased its capacity by 20.6% compared to 2022, in line with the updated guidance for 2023.
It is worth noting that during 2023, the group received 30 aircraft, of which 5 were long haul (wide-body) and 25 short haul (narrow-body), thus allowing it to increase its capacity in all segments. Additionally, in 2023 the group launched 21 routes in total, of which 17 were international and 4 domestic, including 4 routes operated by the group within the context of the Joint Venture with Delta Air Lines.
In 2023, LATAM group continued to strengthen itself, expanding its route network both regionally and globally. Thus, the group’s subsidiaries increased their participation in all the markets where they operate and maintained their leadership in three of the five domestic markets: LATAM Airlines Chile, LATAM Airlines Brazil and LATAM Airlines Peru. In turn, LATAM Airlines Colombia increased its market share by 9 percentage points, after its quick reaction to allocate additional resources in the Colombian market.
Sustainability
During 2023, the LATAM group made important progress in its sustainability strategy, which includes three pillars: Climate Change, Circular Economy and Shared Value.In Climate Change, between 2021 and 2023, more than 250 thousand tons of CO2 were no longer emitted, as a result of efficiency programs implemented by the group. In addition, compensation projects were supported that will allow for the conservation of more than 575,000 hectares of flooded savannahs in Colombia by 2030.
In August, LATAM and Airbus announced the financing of a study by the Massachusetts Institute of Technology (MIT) Joint Program on Global Change Science and Policy (MIT Joint Program) that seeks to identify options to decarbonize aviation in Latin America, and the results of the study will be available this year.
In terms of Circular Economy, by the end of 2023 the group managed to reduce 96% of single-use plastics in all its operations, equivalent to more than 1,700 tons. On the other hand, the “Second Flight” program, which seeks to give a second life to old uniforms through agreements with eight NGOs in the region, has resulted in the creation of more than 15,000 products to date.
In Shared Value, LATAM closed the year with nearly 50 solidarity alliances in five South American countries through the Avión Solidario (Solidarity Plane) program.
Customers
Continuing in its commitment to improving its product offering and transforming the passenger experience, LATAM group introduced the Premium cabin on all its flights and has equipped 65% of its Narrow-Body fleet (single-aisle aircraft) with Wi-Fi, including 99% of the Brazilian affiliate’s fleet and over 50% in the Colombian fleet.
In line with its service digitization strategy, a new website was launched to promote ancillaries and streamlining passenger services. Additionally, progress has been made in the digitization of airport services.
LATAM group passenger satisfaction, as measured by the NPS (Net Promoter Score), increased by 2 percentage points (p.p.) compared to 2022, reaching an index of 48 p.p. On the other hand, cargo achieved a satisfaction index of 58 p.p. in 2023, representing a 7 p.p. increase compared to the previous year.
Throughout the year, LATAM Pass strengthened its presence as the largest loyalty program in Latin America with over 45 million members, being recognized as the «Best Program of the Year» by the Frequent Traveler Awards in 2023.
Furthermore, LATAM group was recognized for the fourth consecutive year as the best airline group in the region at the latest Skytrax World Airline Awards.
