LATAM Airlines Group S.A. announced today its financial results corresponding to the fourth quarter of 2022, closing a year marked by the completion of its restructuring proceeding under Chapter 11, a solid financial result and an operational recovery close to the pre-pandemic.
In relation to the pre-pandemic period, the group managed to reduce its gross debt by 37.5%, going from US$10.4 billion before Chapter 11 to US$6.5 billion at the end of last year, in turn increasing its liquidity by 78%, reaching US$2.3 billion compared to the period prior to the reorganization proceeding started in May 2020.
During the fourth quarter of last year, the group’s total revenues reached US$2.744 billion, which represents 37.5% more than the same period of 2021. As well, EBITDAR reached US$466.8 million in the quarter and LATAM recorded a net income attributable to the owners of the parent company of US$2,538 million as a result of the restructuring process.
“The results of 2022 show a strengthened group and more competitive than before the pandemic. During the year, LATAM Group made significant progress in different areas. The network was expanded through the alliance with Delta and new routes were launched, the cargo business was strengthened and the service for customers was improved. Progress was also made in the renewal of the fleet and the group took a leadership position in sustainability, which allows us to be optimistic about the future. LATAM Group has a competitive cost structure that will allow us to respond to the connectivity challenges of the South American countries”, said Roberto Alvo, CEO of LATAM Airlines Group.
Meanwhile, the CFO of LATAM Airlines Group, Ramiro Alfonsín added that “the group made significant financial progress. On one hand, gross debt was substantially reduced by 37.5% compared to the pre-pandemic period and liquidity increased, reaching US$2.3 billion at the end of last year. Also, LATAM Group showed a solid operational recovery in the fourth quarter in which consolidated operations were 83.2% of 2019 levels (measured in ASKs), which represents the highest level of quarterly since the beginning of the pandemic. Today LATAM Airlines Group has a more competitive cost structure, a solid balance sheet and a unique level of liquidity in the region to face the challenges of the business”.
Operational recovery and connectivity
During the fourth quarter, the consolidated operations of LATAM Group were 83.2% of 2019 levels (measured in ASKs). Last year, LATAM Group transported approximately 62 million passengers, which represents an increase of 22 million compared to 2021, ending the year with 144 destinations in 22 countries, in line with the number of destinations flown at the end of 2019.
By 2023, LATAM Group expects annual growth in its passenger and cargo operations of more than 20% compared to 2022. In 2023, LATAM Group will fly 38 routes that it did not operate in 2019, among which two are part of the JV with Delta.
In terms of connectivity, 2022 was a great year for the LATAM Group. After the implementation of the joint venture (JV) with Delta Air Lines, passengers will have the possibility of accessing more than 300 destinations between the US/Canada and South America (Brazil, Chile, Colombia, Paraguay, Peru and Uruguay). In July 2023, LATAM Airlines Brazil will operate Los Angeles – Sao Paulo and LATAM Airlines Colombia will operate Orlando – Bogotá. Regarding the latter route, the Colombian subsidiary plans to transport 120,000 passengers a year, offering better connection alternatives from within Colombia and Ecuador to the east coast of the United States through the Delta hub in Orlando and the LATAM connection center in Bogotá.
Meanwhile, the group continued to show its growth in the region, with affiliates in Brazil, Chile and Peru, increasing its market share in their respective domestic segments. In the case of the Brazilian subsidiary, it went from a 34% market share in 2019 to 37% at the end of the year, while in the Peruvian subsidiary it went from 62% to 65% and in the Chilean subsidiary it went from 58% to 60%.
Currently, LATAM Airlines Brazil flies to 54 Brazilian destinations, the highest number in its history in the country. In 2022 alone, it began flying to 6 new destinations in Brazil: Presidente Prudente, Cascavel, Caxias do Sul, Juiz de Fora/Zona da Mata, Montes Claros and Sinop. As well, it flew again directly from São Paulo/Guarulhos to Boston and Rome, and opened the routes Rio de Janeiro/Galeão-Buenos Aires/Ezeiza, Rio de Janeiro/Galeão-Buenos Aires/Aeroparque, Rio de Janeiro/Galeão – Lima, Florianópolis-Santiago, Curitiba-Santiago, Porto Alegre-Lima and Fortaleza-Miami.
Customers and Sustainability
Continuing with its efforts to improve its product offering and transform the experience of its passengers, LATAM Group modernized 81 aircraft in 2022. In addition LATAM Airlines Brazil operates 98 domestic narrow body aircraft that have Wi-Fi in the cabin, a function that will be included in the entire Brazilian fleet during the first half of 2023.
Under the name of “LATAM Lounge”, last year, LATAM Group opened the doors of a renovated space in Chile dedicated to preferential passengers and members of airline partners with trade agreements, so that they can wait for their flight departure or connection to their destination. The new proposal, which comes to replace the old VIP lounge, offers a more sustainable service with a marked Latin American influence.
In terms of sustainability, in 2022, the group announced the expansion of the alliance with the Cataruben Foundation, in CO2BIO, a project for the conservation and restoration of floodplain savannas and forests in South America. Located in the Colombian Orinoquía, CO2BIO expects, by 2030, to capture 11.3 million tons of CO2 in a 575,000-hectare property, equivalent to more than three times the size of cities such as Bogotá or Sao Paulo.
During the year, LATAM Group managed to reduce single-use plastics by 77% on board its flights and announced that it will seek to use 5% of sustainable aviation fuels (SAF) by 2030.
The group was recognized as a leader in the Americas and Europe and fifth worldwide in environmental, social and governance sustainability practices according to Standard & Poor’s (S&P Global) Corporate Sustainability Assessment (CSA) conducted in November 2022.
