LATAM closes 2022 with US$2.3 billion in liquidity
LATAM Airlines Group released its financial results for the fourth quarter of 2022, closing a year marked by the completion of its Chapter 11 restructuring process, a solid financial result and an operational recovery close to the pre-pandemic period.
In relation to the pre-pandemic period, the group managed to reduce its gross debt by 37.5% from US$10.4 billion before Chapter 11 to US$6.5 billion at the end of last year, while increasing its liquidity by 78% to US$2.3 billion compared to the period prior to the reorganization process initiated in May 2020.
During the fourth quarter of last year, the group’s total revenues reached US$2,744 million, which represents a 37.5% increase over the same period of 2021. EBITDAR reached US$466.8 million in the quarter and LATAM recorded a net income attributable to owners of the parent company of US$2,538 million as a result of the restructuring process.
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“The 2022 results show a strengthened and more competitive group than before the pandemic. During the year, the 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 customer service improved. Progress was also made in fleet renewal and the group took a leadership position in sustainability, which allows us to be optimistic about the future. The LATAM group has a competitive cost structure that will enable it to respond to the connectivity challenges of South American countries,” said Roberto Alvo, CEO of LATAM Airlines Group.
Operational recovery and connectivity
During the fourth quarter, LATAM group consolidated operations were 83.2% of 2019 levels (measured in ASK). Last year, the LATAM group carried approximately 62 million passengers, representing an increase of 22 million over 2021, ending the year with 144 destinations in 22 countries, in line with the number of destinations flown at the close of 2019.
By 2023, LATAM group expects annual growth in its passenger and cargo operations of more than 20% over 2022. In 2023, the LATAM group will fly 38 new routes that it did not operate in 2019, two of which are part of the JV with Delta.
In terms of connectivity, 2022 was a great year for the LATAM group. Following the implementation of the joint venture (JV) with Delta Air Lines, passengers will have the possibility to access 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 – Bogota. Regarding the latter route, the Colombian subsidiary plans to transport 120 thousand passengers per year by offering better connection alternatives from the interior of Colombia and Ecuador to the east coast of the United States through Delta’s hub in Orlando and LATAM’s hub in Bogota.
At the same time, the group continued to show growth in the region, with the subsidiaries in Brazil, Chile and Peru increasing their market share in their respective domestic segments. In the case of the Brazilian subsidiary, it went from 34% market share in 2019 to 37% at year-end, while the subsidiary in Peru went from 62% to 65% and the subsidiary in Chile went from 58% to 60%.
→ LATAM renews its fleet and expects to finish 2023 with 31 A320neo family aircraft
LATAM Airlines Brazil currently 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. It also resumed direct flights 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 its efforts to improve its product offering and transform the passenger experience, the LATAM group upgraded 81 aircraft in 2022. For its part, LATAM Airlines Brazil operates 98 narrow body aircraft domestically that feature in-cabin Wi-Fi, a feature that will be included across the entire Brazilian fleet during the first half of 2023.
Last year, under the name “LATAM Lounge”, the LATAM group opened the doors of a renovated space in Chile dedicated to preferential passengers and airline partners with commercial agreements, so that they can wait for their flight departure or connection to their destination. The new proposal, which replaces the old VIP lounge, offers a more sustainable service with a strong Latin American influence.
In terms of sustainability, in 2022 the LATAM group announced the expansion of its partnership with the Cataruben Foundation in CO2BIO, a project for the conservation and restoration of flooded savannas and forests in South America. Located in the Colombian Orinoco region, CO2BIO expects to capture 11.3 million tons of CO2 in an area of 575,000 hectares by 2030, equivalent to more than three times the size of cities such as Bogota or Sao Paulo.
During the year, the LATAM group achieved a 77% reduction in single-use plastics on board its flights and announced that it will seek to use 5% Sustainable Aviation Fuels (SAF) by 2030.
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