Category Archives: LATAM Airlines Group

Agreement between LATAM and UNHCR to help refugees around the world

In order to support humanitarian crises worldwide, LATAM group will make free passenger and cargo transport available to the United Nations High Commissioner for Refugees (UNHCR). This aid is intended to support people who have had to leave their homes in search of safety.

This arrangement allows for the transfer of cargo at no cost, and contribution towards in tickets to destinations within the LATAM network. The initiative is part of the LATAM group’s “Solidarity Plane” program which seeks to generate value in society by providing free transportation to cover different needs in South America.

According to the UNHCR Global Trends report, 1% of humanity was forced to flee their homes in 2020. A major humanitarian crisis is currently unfolding in Ukraine and neighboring countries, which has displaced more than 10 million people. Latin America and the Caribbean is no exception, with more than 18 million displaced people in need of aid. In addition, “we cannot forget places like Afghanistan, Syria, Ethiopia, Venezuela, Myanmar and many others that continue to need the support of UNHCR and other humanitarian organizations,” said Filippo Grandi, United Nations High Commissioner for Refugees.

LATAM’s “Solidarity Plane” program is part of the group’s sustainability strategy, and seeks to generate value in society through free passenger and cargo transportation. During the pandemic, “Solidarity Plane” has played an active role in the transportation of vaccines within the countries where it operates, mobilizing more than 232 million doses, in addition to transporting more than 3,400 health professionals to attend to urgent needs related to the COVID-19 pandemic.

Recently, the program announced alliances with solidarity and civil society organizations in Brazil, Chile, Colombia, Ecuador and Peru, making available to them the expertise, infrastructure and connectivity through tickets and cargo transportation at no cost to organizations.

LATAM presents its results for 4Q21

LATAM Airlines Group announced its financial results for the fourth quarter of 2021 today, which show continuous improvement in air traffic levels as a result of the easing of travel restrictions, and the progress of vaccinations.

During the last quarter, total operating income reached US$1,995.9 million, 30.5% below 2019 levels, but 51.9% higher than the third quarter of 2021. For the first time since the pandemic began, the group recorded a positive operating result, amounting to US$73.4 million during the quarter. 

Overall, total revenues reached US$5,011.3 million during 2021, a 51.0% decrease compared to 2019.

LATAM group  operations reached 63.5% of 2019 levels during the quarter (measured in ASK), corresponding to a capacity increase of 29.6% compared to the third quarter of 2021, mainly driven by the reactivation of domestic traffic.

As in previous quarters of 2021, the operation of LATAM’s cargo subsidiaries continued to show solid performance, with revenues that increased 66.0% compared to the same period in 2019, amounting to US$464.8 million. The slow recovery of international flights has prevented the return to pre-pandemic levels of capacity.

Total operating expenses were $1,992.4 million in the fourth quarter of 2021, representing a decrease of 23.7% compared to the same period in 2019, following the group’s cost restructuring efforts. The CASK (cost per ASK) ex-fuel improved 25.0% compared to the third quarter of 2021, from US$7.4 cents to US$5.6 cents. Operations-related costs remain below pre-2019 pandemic levels, but have shown an increase in recent quarters, driven by operational recovery and strong fuel price increases.

Roberto Alvo, CEO of LATAM Airline Group, said “we hope that the operation continues to recover to reach the magnitudes that we knew in 2019. We cannot lose sight of the fact that we find ourselves in an uncertain time, not only due to the effects of the new COVID-19 variants, but now also due to the tension of a warlike conflict that has the world on alert and that has an impact on the price of oil”.

The group is awaiting the approval of its Disclosure Statement by the Court in the United States. In addition, LATAM is targeting to emerge from Chapter 11 during the second half of 2022, closing a stage of important transformation that has allowed the establishment of a renewed organization, more agile, with a solid balance sheet, a very competitive cost structure and a good level of liquidity, which will allow it to tackle future business challenges on a sound footing.

During 2021, LATAM group not only simplified processes, redesigned fleet strategies, renegotiated contracts and restructured costs, but also took a fundamental step for future operations projection. In the midst of the pandemic, LATAM presented its sustainability strategy for 2050 with a focus on climate change, circular economy, and shared value.

The sustainability strategy considers well-defined goals: zero waste in landfills by 2027, carbon neutrality by 2050, and the protection of iconic ecosystems in South America. In this last area, the alliance between LATAM and the Cataruben Foundation stands out; this project focuses on the conservation and restoration of an iconic ecosystem in South America, 200,000 hectares of floodable savannah located in the Orinoquía region of Colombia.

Through the “Solidarity Plane” program, which seeks to generate value in society through the transportation of medical supplies, personnel and cargo at no cost, the group has transported more than 232 million COVID-19 vaccines, in addition to carrying more than 3,400 health professionals to address urgent needs related to the pandemic.

LATAM renews its travel kits with a focus on sustainability and local design

LATAM recently presented its Travel Eco Kits, a new amenity kit concept for passengers traveling in Premium Business cabins. These kits are based on local design and gradually incorporate sustainable elements. The collectable bags are designed to be reusable and versatile with a very long lifespan, and new and exciting designs. 

Following LATAM’s commitment to eliminate single-use plastics, the bag is delivered unwrapped, and its amenities are made more environmentally friendly through the incorporation of reusable materials such as a bamboo toothbrush with a sugar cane cap.  The earplugs are wrapped in kraft paper to reduce the use of plastic materials as much as possible, and the socks and eye covers are made from recycled plastic.

The bag includes cosmetic products (hand cream, lip balm and a refreshing towel) produced by Feito Brasil, a brand certified as B Corp™ (certification that recognizes performance in financial, social and environmental sustainability). Feito Brasil prides itself on making products with a focus on sustainability. These products are cruelty-free and vegan, use natural ingredients and raw materials, and are locally produced by Brazilian artisans. 

The design of the new Travel Eco-Kits is to display the work of South American artists chosen by LATAM for their emerging trajectory and/or for being transformers of their communities. The first two artists to join this initiative are Tomás Olivos (Chile) and Hamilton Aguiar (Brazil). The following designs will be by artists from Ecuador, Peru, Colombia and Argentina.

Passengers on the Santiago de Chile – Madrid – Santiago de Chile and São Paulo/Guarulhos – Miami – São Paulo/Guarulhos routes will be the first to receive the new Travel Eco Kits during on-board service, which will be progressively implemented on remaining routes during 2022.

With this initiative, LATAM intends to take another step forward in its sustainability strategy, focused on generating environmental and social value in the community, and promoting social, environmental and economic development in the countries where it operates. 

 About the artists:

HAMILTON AGUIAR

● Visual artist born in Belo Horizonte (Brazil) in 1965.

● His work is clearly inspired by natural beauty, with a transcendent quality that cannot be imitated.

● He has participated in individual and collective exhibitions throughout his thirty-year career, with notable exhibitions in galleries in Germany, Korea, Sweden, Canada, and Singapore, among others.

● His work is displayed by important galleries and exhibition spaces of contemporary art in Latin America and the United States. It has been exhibited at international fairs and is part of important collections of contemporary art, both public and private.

 

TOMÁS OLIVOS

● Chilean illustrator born in Santiago in 1987. He currently resides in Barcelona.

● Author of the books “Abecedario Ilustrado” (2018) and “El gran Espíritu” (2019), in addition to participating in publishing projects in Spain, Argentina, Chile, among others.

● He has a special obsession with nature and loves to draw characters with long arms and very small faces. His source of inspiration is strongly related to his own anatomy: “I have short legs and arms, it may be a reflection of the complex I have with my body.”

LATAM Group projected to fly 72% of its flights in January

LATAM Airlines Group’s operational passenger projection for January 2022 is estimated to reach up to 72% (measured in available seat kilometers – ASK) of January 2019 levels and a pre-pandemic context. However, this estimate could adjust downwards depending on the increase in cases of the Omicron variant of COVID-19.

Operations in new destinations, such as Neiva (Colombia) and Loja (Ecuador), are planned to begin this month, in addition to the resumption of the seasonal Santiago-Punta del Este route.

LATAM plans to operate approximately 1,245 daily domestic and international flights during January, connecting 132 destinations in 18 countries. The cargo business has 1,190 flights scheduled on cargo freighters with an average utilization level that is 8% higher than the same period in 2019. These projections are subject to the evolution of the pandemic, particularly the rise in Omicron variant cases in the countries where LATAM Airlines Group operates.

In December 2021, passenger traffic (measured in revenue passenger-kilometers – RPK) was 68.8% in relation to the same period in 2019, based on an operation measured in ASK (available seat-kilometers) of 70.1% compared to December 2019. The load factor decreased 1.6 percentage points, reaching 82.0%.

In regards to cargo operations, the load factor was 60.6%, which corresponds to an increase of 3.4 percentage points compared to December 2019.

LATAM Airlines Group Operational Estimate – January 2022 

(Passenger operations measured in ASK / Cargo operations measured in ATK)

Brazil

  • 82% projected operation (versus January 2019). December 2021 projection reference: 74%
    • 107% domestic and 54% international
  • Total January destinations: 49 domestic (equivalent to 583 daily flights on average) and 19 international

Chile

  • 60% projected operation (versus January 2019). December 2021 projection reference: 59%
    • 85% domestic and 50% international
  • Total January destinations: 16 domestic (equivalent to 166 daily flights on average) and 22 international
  • Updates:
      • International: Restart the seasonal route Santiago-Punta del Este (January and February)

Colombia

  • 109% projected operation (versus January 2019). December 2021 projection reference: 102%
    • 162% domestic and 71% international
  • Total January destinations: 17 domestic (equivalent to 185 daily flights on average) and 4 international
  • Updates:
      • Domestic: New Bogotá-Neiva route

Ecuador

  • 46% projected operation (versus January 2019). December 2021 projection reference: 40%
    • 133% domestic and 21% international
  • Total January destinations: 8 domestic (equivalent to 37 daily flights on average) and 2 international
    • Updates:
      • Domestic: New Quito-Loja route

Perú

  • 67% projected operation (versus January 2019). December 2021 projection reference: 63%
    • 105% domestic and 55% international
  • Total January destinations: 19 domestic (equivalent to 159 daily flights on average) and 20 international

Cargo

  • 91% projected operation (versus January 2019). December 2021 projection reference: 98%
    • 82% domestic belly and 59% international belly*
    • 152% dedicated freighter

* Belly: merchandise transported in the cargo hold (lower deck) of the plane.

Operational Estimate by Segment vs 2019 – January 2022

(Measured in ASK)

Domestic Spanish-speaking countries

88%

Domestic Brazil

107%

International

51%

Consolidated Total

72%

LATAM Airlines Group projects operation of 69% for December

LATAM Airlines Group’s operational passenger projection for December 2021 is estimated to reach 69% (measured in available seat kilometers – ASK) of 2019 levels, and a pre-pandemic context.

The increases in the operational projection for Colombia (+14 pp) and Brazil (+10 pp) stand out, compared to the November projection for this year. In Brazil, the increase is accompanied by new domestic routes to Jericoacoara and Vitória da Conquista, in addition to the reactivation of flights to Milan and London from São Paulo / Guarulhos. The seasonal routes Santiago-Florianópolis, São Paulo/Guarulhos-Punta del Este and Santiago-Punta del Este have also returned. With these announcements, the group maintains its expectation of closing the year with operations of over 65% of 2019 capacity levels.

LATAM plans to operate approximately 1,212 daily domestic and international flights during December, connecting 129 destinations in 18 countries. The cargo business has 1,150 flights scheduled on cargo freighters with an average utilization level that is 20% higher than the same period in 2019. These projections are subject to the evolution of the pandemic and the travel restrictions in the countries where LATAM Airlines Group operates.

In November 2021, passenger traffic (measured in revenue passenger-kilometers – RPK) was 62.3% in relation to the same period in 2019, based on an operation measured in ASK (available seat-kilometers) of 62.8% compared to November 2019. The load factor decreased 0.6 percentage points, reaching 82.0%. With regard to cargo operations, the load factor was 59.4%, which corresponds to an increase of 2.1 percentage points compared to November 2019.

 

LATAM Airlines Group files plan of reorganization

LATAM Airlines Group S.A. and its affiliates in BrazilChileColombiaEcuadorPeru, and the United States today announced the filing of a Plan of Reorganization, which reflects the path forward for the group to exit Chapter 11 in compliance with both U.S. and Chilean law.

The Plan is accompanied by a Restructuring Support Agreement (the “RSA”) with the Parent Ad Hoc Group, which is the largest unsecured creditor group in these Chapter 11 cases, and certain of LATAM’s shareholders. The RSA documents the agreement between LATAM, the aforementioned holders of more than 70% of parent unsecured claims and holders of approximately 48% of 2024 and 2026 U.S. Notes, and certain shareholders holding more than 50% of common equity, subject to the execution of definitive documentation by the parties and the obtaining of corporate approvals by those shareholders. As they have throughout the process, all of the companies in the group are continuing to operate as travel conditions and demand permit.

Plan Overview

The Plan proposes the infusion of $8.19 billion into the group through a mix of new equity, convertible notes, and debt, which will enable the group to exit Chapter 11 with appropriate capitalization to effectuate its business plan. Upon emergence, LATAM is expected to have total debt of approximately $7.26 billion1 and liquidity of approximately $2.67 billion. The group has determined that this is a conservative debt load and appropriate liquidity in a period of continued uncertainty for global aviation and will better position the group going forward.

Specifically, the Plan outlines that:

  • Upon confirmation of the Plan, the group intends to launch an $800 million common equity rights offering, open to all shareholders of LATAM in accordance with their preemptive rights under applicable Chilean law, and fully backstopped by the parties participating in the RSA, subject to the execution of definitive documentation and, with respect to the backstopping shareholders, receipt of corporate approvals;
  • Three distinct classes of convertible notes will be issued by LATAM, all of which will be preemptively offered to shareholders of LATAM. To the extent not subscribed by LATAM’s shareholders during the respective preemptive rights period:
    • Convertible Notes Class A will be provided to certain general unsecured creditors of LATAM parent in settlement (dación en pago) of their allowed claims under the Plan;
    • Convertible Notes Class B will be subscribed and purchased by the above referenced shareholders; and
    • Convertible Notes Class C will be provided to certain general unsecured creditors in exchange for a combination of new money to LATAM and the settlement of their claims, subject to certain limitations and holdbacks by backstopping parties.
  • The convertible notes belonging to the Convertible Classes B and C will therefore be provided, totally or partially, in consideration of a new money contribution for the aggregate amount of approximately $4.64 billion fully backstopped by the parties to the RSA, subject to receipt by the backstopping shareholders of corporate approvals;
  • LATAM will raise a $500 million new revolving credit facility and approximately $2.25 billion in total new money debt financing, consisting of either a new term loan or new bonds; and
  • The group also used and intends to use the Chapter 11 process to refinance or amend the group’s pre-petition leases, revolving credit facility, and spare engine facility.

LATAM reports revenue was up 47.8% in the third quarter but reported a net loss of $691.9 million

LATAM Airlines (Chile) Airbus A321-211 WL CC-BEO (msn 7298) PMC (Robbie Shaw). Image: 955835.

LATAM Group issued this statement:

Alongside the publication of its results for the third quarter of the year, the LATAM group reported that it noted a continued improvement in its revenues during the period, reaching US$1,314 million, which represents an increase of 47.8% compared to the second quarter of 2021 and 156.1% compared to the third quarter of 2020. Despite this improved performance, total revenues for the third quarter are 50.7% below 2019 as a result of the ongoing effects of the pandemic.

Cargo revenues recorded an increase of 43.6% compared to 2019, reaching US$361.4 million.

Roberto Alvo, CEO of LATAM Airlines Group, said that “our operation continues to recover, which translates to a substantial revenue improvement during the third quarter. We are already seeing the fruits of our efficiency initiatives, which will allow us to position ourselves as a highly competitive group once our Chapter 11 process is finalized.”

Regarding the operations, the LATAM group showed significant advances in the third quarter, reaching 49.7% of 2019 levels of capacity (measured in ASK), driven by a strong recovery in its domestic operations, and a capacity increase of 75% compared to the second quarter of 2021. The group expects to end the year operating more than 65% of consolidated capacity (measured in ASK) versus 2019 levels.

Total costs amounted to US$1,793 million in the period, representing a decrease of 25.2% compared to the third quarter of 2019. The group’s unit cost (cost per ASK, excluding fuel) decreased 18.3% versus the second quarter of this year, despite higher maintenance costs and a slower recovery of international operation. This result is a reflection of the efficiencies achieved by the group during the last months, which will translate into savings of more than US$900 million annually.

Operating loss in the third quarter of the year totaled US$479.2 million, while the net loss was US$691.9 million, impacted by the effects of maintenance costs, restructuring expenses and other non-recurring expenses.

Sustainability 

During the third quarter, LATAM continued to make progress in the creation of regional alliances within the context of the Solidarity Airplane program, making its connectivity, infrastructure, experience, capacity and speed available to foundations and organizations free of charge. Partnerships include Peru’s Food Bank, Operation Smile, ANIQUEM and ALINEN in Peru; SOLCA – HOPE, INDOT, Red Cross and Operation Smile in Ecuador; and Operation Smile, América Solidaria and the National Institute of Health, Panthera Colombia and the Schooner Bight Ethnic Association in Colombia, among others. It should be noted that Solidarity Airplane also has alliances in Brazil and Chile.

Since the beginning of the pandemic, the group has transported more than 160 million COVID-19 vaccines for free within Brazil, Chile, Ecuador and Peru as part of the same program.

Also, related to the climate change pillar of LATAM’s sustainability strategy, the group recently announced the CO2BIO project, an alliance that represents the first conservation project in the Orinoquia region of Colombia by the Cataruben Foundation, leveraged by the United States Agency for International Development (USAID) and with the participation of Panthera Colombia. CO2BIO includes the conservation of forest, wetland and grassland and the development of sustainable productive activities, and is the group’s first iconic ecosystem conservation project to contribute to the goal of carbon neutrality by 2050.

Top Copyright Photo: LATAM Airlines (Chile) Airbus A321-211 WL CC-BEO (msn 7298) PMC (Robbie Shaw). Image: 955835.

LATAM Airlines (Chile) aircraft slide show:

LATAM Airlines (Chile) aircraft photo gallery:

LATAM announces plans to conserve South America’s iconic ecosystems

LATAM Group made this announcement:

  • The alliance with the CO2BIO conservation project in the Colombian Orinoquía will protect 200,000 hectares of flooded savanna, home to more than 2,200 species.

  • During the next few months, LATAM expects to announce new projects for the conservation of iconic ecosystems in Brazil, Chile, Ecuador and Peru.

LATAM Group announced its first alliance with a project dedicated to the conservation and restoration of an iconic ecosystem in South America. The project, called CO2BIO, is located in the Colombian Orinoquía and covers more than 200,000 hectares of flooded savanna. Over the next few months, the group hopes to unveil new alliances in the countries where it operates in the region.

CO2BIO has been promoted by the Cataruben Foundation and has the support of the Natural Wealth Program of the United States Agency for International Development (USAID) and Panthera Colombia. This is the first project in LATAM Group’s portfolio that supports the challenge of offsetting 50% of its domestic routes by 2030 and achieving carbon neutrality by 2050.

The CO2BIO project includes activities for the conservation of forests, wetlands and grasslands, in addition to promoting the development of sustainable production activities in the departments of Casanare, Vichada, Arauca and Meta. One hundred and ninety-one families live in the area, which form part of the conservation project of the 200,000 hectares of flooded savanna, home to more than 2,000 species.

Through conservation and rehabilitation actions, this initiative will capture 1 million tons of CO2 during the 2021-2023 period, and has the potential to capture up to an additional 2.8 million tons by 2025, if progress is made in new stages of the project. During the next few months, LATAM expects to announce new projects for the conservation of iconic ecosystems in Brazil, Chile, Ecuador and Peru.

It should be remembered that LATAM Group launched its sustainability strategy in May 2021, which commits to eliminate single-use plastics by 2023, generate zero waste to landfill by 2027, offset 50% of domestic emissions by 2030 and be carbon neutral by 2050.

LATAM ends the second quarter with US$2.3 billion of liquidity and projects improved operational prospects for the rest of the year

LATAM issued this statement:

As part of the delivery of the results for the second quarter of the year, LATAM Group reported that it foresees better operational prospects for the next six months, despite the profound impact of the pandemic in Latin America since the start of the year. As a result, the group plans to reach a capacity greater than 50% (measured in ASK and compared to 2019 levels) by the end of the third quarter of 2021, which would represent LATAM Group’s highest level of operation since the pandemic began.

In turn, the group reported that it ended the quarter with US $2.3 billion of available liquidity, US $1.5 billion in cash and US $800 million in undrawn, committed DIP financing.

Roberto Alvo, CEO of LATAM Airlines Group, said that “the new waves of the pandemic in the region generated a complex semester, which did not allow us to continue recovering our operation as we expected. However, progress in our restructuring plan was positive. In addition, we maintained our global leadership in punctuality, accelerated our cost reduction, launched our sustainability and inclusion plans, and ensured that our passengers flew comfortably and safely. We look forward to a more active second semester, always thinking of strengthening the group and taking care of our clients.”

In the second quarter, total revenues amounted to US $888.7 million, a 62.5% decrease compared to the same period in 2019. Passenger revenues fell 77.4%, though partially offset by an increase of 37.5% in cargo revenues, both compared to the same period of 2019. Cargo operations continue to stand out for their contribution to the group, reaching revenues of US $370.2 million during the quarter, mainly driven by the cargo freighters, which reached historic utilization levels after a strong import and export scenario.

For their part, costs decreased 46.5% in relation to the same period of 2019, reaching US $1.2 billion, reflecting the notable effort made by the group to reduce and vary its fixed costs.

Operating income recorded losses of US $357.7 million in the analyzed quarter.

Sustainability
A notable event of this period, and which is related to the projection of the LATAM Group in the long term, was the launch of its sustainability strategy, which is based on four pillars of action: climate change, environmental management, circular economy and shared value – measures with which the Group will seek to offset 50% of its domestic emissions by 2030, establishing a path to be carbon neutral by 2050.

 

In May, the group resumed its recycling activities, which were temporarily suspended due to the pandemic, including the restart of the LATAM Airlines Chile “Recycle Your Trip” program and the “Second Flight” uniform recycling program of LATAM Airlines Peru. These will be extended to other subsidiaries of the group during 2021. Additionally, the group recently announced the formalization of alliances between its Solidarity Plane program and various foundations and organizations in both Chile and Brazil. In the first case, LATAM is working with DKMS, Coaniquem, América Solidaria, TECHO, Minsal and Fundación Fútbol Más. In Brazil, the group has new alliances with the Brazilian Association for the Defense of Women, Children and Youth (Asbrad), Burning Support Institute (IAQ), National Civil Defense and the Brazilian Institute for the Environment and Renewable Natural Resources (Ibama).

LATAM seeks court approval for 70 Airbus A320neo aircraft

LATAM Airlines Group issued this statement:

LATAM Airlines Group presented for approval before the Court in the United States an agreement with Airbus for the purchase of 28 new aircraft, in addition to the 42 narrow body aircraft already agreed upon, as part of the modernization and efficiency of its fleet for the coming years.

This order, which totals 70 aircraft, maintains the LATAM Airlines Group’s fleet as the largest in Latin America, with greater range and capacity. The integration of aircraft of the A320neo family implies more efficient engines, aerodynamic improvements and the latest technologies that provide 20% more efficiency in fuel consumption, therefore, lower CO2 emissions, together with a 50% reduction in oxide emissions nitrogen and 50% of the acoustic footprint.

With the signing of this agreement, the group aims to strengthen its operations in all its subsidiaries at the regional level with a modern fleet and maximum efficiency in environmental matters, one of the pillars of its sustainability strategy. In turn, it seeks to consolidate the longest range of destinations in and from Latin America and the Caribbean, hand in hand with the connectivity agreements with Delta, currently under review by various regulatory authorities in the countries where the group operates.