LATAM updates business plan for the next five years
LATAM group announced this Wednesday an update of the business plan presented a year ago that includes its five-year financial projections adjusted to the new macroeconomic context and an estimate of cost savings of more than 1,000 million dollars per year.
According to a statement released by the airline, LATAM “has been actively working to improve its cost structure and take advantage of the restructuring opportunity within the framework of its Chapter 11 process” in the United States.
→ LATAM Airlines recovers its route between Quito and Miami.
“In the new version of the plan, the group updates its estimate of cost savings from US$900 million to more than US$1 billion annually through initiatives already in place,” the note added.
The airline also revealed that it has “implemented structural transformations: fleet renegotiation, improving its relative cost position, strengthening its network and reducing its total debt by approximately 36% compared to pre-pandemic debt.”
“On demand, the group expects a recovery in the domestic markets of the subsidiaries to the levels of 2019 by the end of 2022. However, in the case of Colombia, said recovery was reached in the first quarter of this year and is expects Brazil and Ecuador to achieve it within the third quarter,” he detailed.
Regarding international air operations, the company warned that “the recovery will be slower, reaching 2019 levels in mid-2023. It should be noted that international traffic represented approximately 45% of revenues in 2019.
«By 2024, the group projects a passenger operation measured in available seat kilometers (ASK) similar to that of 2019. It is expected that by 2024 the group will exceed the levels of 2019, reaching US$11.5 thousand million,” he noted.
“This updated business plan reflects how the LATAM group is better prepared to face future challenges, with a more competitive and flexible cost structure, with a more complete offer for customers and moving towards a more sustainable aviation,” he argued, for his part, Roberto Alvo, executive director of the LATAM group.
On June 18, the Bankruptcy Court for the Southern District of New York confirmed the Group’s Reorganization and Financing Plan to exit the Chapter 11 process, which is expected to occur in the last quarter of this year, reported EFE.
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Plataforma Informativa de Aviación Comercial líder en América Latina.