Latin America’s largest carrier, LATAM Airlines Group narrowed its net loss to $691.9 million during the third quarter of 2021, a slight improvement compared to a $769.6 million loss in the second quarter of 2021.
The carrier attributed net loss reduction to a strong recovery in LATAM affiliates’ domestic operations and passenger capacity increase, as well as solid cargo business.
In Q3 2021, LATAM’s passenger capacity increased by 75% compared to the second quarter of 2021. Total operating revenues in Q3 2021 amounted to $1.3 billion, 50.7% below the pre-pandemic levels. Compared with the second quarter of 2021, total revenues increased by 47.8%, a reflection of the recovery in passenger operations during Q3 2021.
LATAM’s financial report stated: “The third quarter results reflected a significant improvement in the LATAM group operations, with an average of 49.7% of 2019 levels (measured in ASKs), driven by a strong recovery in the affiliates’ domestic operations.”
The airline’s cargo revenues grew by 43.6% in Q3 2021, compared to the same period in 2019, totaling $364.1 million. During the quarter, cargo operations reached a 61.9% cargo load factor. Thus, LATAM has laid out plans to convert ten Boeing 767 passenger aircraft into freighters between 2021 and 2023 in order to utilize current opportunities in the cargo sector.
Despite narrowing its net loss, LATAM emphasized that the battle against the COVID-19 pandemic is not over, as “the operational activity still lags well behind 2019 levels”. The airline also remarked that fuel prices and depreciation of some foreign currencies has added to Q3 2021 losses and “prevailed during the beginning of the fourth quarter”.
LATAM stated: “The international traffic is recovering slower than initially expected and significant travel restrictions in the region are still in place during most of the quarter.”
Looking ahead to the fourth quarter of 2021, LATAM expects to end the year operating over 65% of its pre-pandemic capacity.
Additionally, LATAM is currently reviewing “the adequate fleet plans” for the upcoming future. LATAM has reached an agreement with Boeing and Airbus to acquire two Boeing 787 Dreamliners and 70 Airbus A320neo aircraft.
The delivery dates are expected through 2028, though could be modified “as a result of the ongoing discussions held with aircraft manufacturers” in the context of the company’s reorganization and restructuring of its debt under Chapter 11 protection in the United States.
The company and its affiliates in Chile, Peru, Colombia, Ecuador and the United States filed for voluntary reorganization and restructuring of their debt under Chapter 11 protection in the United States on May 26, 2020.
