Summary In Q2, LATAM Airlines praised its customer-centric business strategy that led to its strong quarterly results. The airline group ended the period with a net profit of $104.8 million, which was adjusted down from $145 million.
LATAM Airlines once again celebrated being relisted on the New York Stock Exchange (NYSE), which happened after the quarter had ended. LATAM Airlines, the airline group comprised of many carriers in South America, has continued to grow its capacity year-on-year (YoY), resulting in growing revenues, yet its three-month profit has gone down due to cost growth outpacing revenue growth and various adjustments. Growth despite significant operational disruptions LATAM Airlines cited its customer-centric business strategy as the key that allowed the airline to unlock the door to strong operational and financial results quarter after quarter, with Q2 2024 being no exception.
During the quarter, the group, which has subsidiaries in Brazil, Colombia, Chile, Ecuador, and Peru, transported 19.1 million passengers, an increase of 11.7% YoY.
According to LATAM Airlines, the group managed to grow despite LATAM Airlines Brazil facing a significant impact from floods in the state of Rio Grande do Sul, Brazil, which included the complete shutdown of Salgado Filho International Airport (POA) in May. Speaking about the first half of the year, the group cited growth in all of its business segments and, in particular, in LATAM Airlines’ international network, which grew 24.6% YoY.
Its overall Q2 capacity, measured in available seat kilometers (ASK), grew by 16.2%, while its revenue per ASK (RASK) decreased by 1.6% to $6.
9 cents YoY during the quarters. Meanwhile, the cost per ASK (CASK) also decreased by 2.7% YoY.
Meanwhile, H1 ASKs and RASKs increased by 16.8% and 0.8%, respectively, while six-month CASK decreased by 2.
7%. The successful quarter led to LATAM revising its financial outlook upward for 2024. Decreasing profitability In Q2, LATAM Airlines passenger revenues were $2.
6 billion, increasing by 14.3% YoY. In addition to $380 million in cargo and $46.
6 million in other revenue, the group ended the three-month period with $3 billion of total revenue, or 13.2% more than during the same quarter a year prior. Its unadjusted net profit was $145 million, yet its adjusted net profit was $104.
8 million, representing a decline of 25.9% compared to Q2 2023. According to Ramiro Alfonsín, the chief financial officer (CFO) of LATAM Airlines, the group’s results during the quarter were “solid,” with the CFO adding that they were driven by the airlines’ growing capacity and strong financial performance despite being in the low season in South America.
Furthermore, LATAM Airlines had faced a macroeconomic environment that put pressure on foreign exchange rates, impacting the group’s final profit line. “The diversified revenue structure, as well as the group's ability to reallocate capacity among markets, will allow results to be in line with the guidance, supported by historically stronger quarters to come and a stable demand environment.” The airline group saw a 26.
7% increase in international passenger numbers year-on-year. Relisting in New York The group once again highlighted that its shares were once again trading on the New York Stock Exchange (NYSE), several months after a judge had finally closed LATAM Airlines’ Chapter 11 bankruptcy case in June 2023. Furthermore, it successfully renegotiated its revolving credit facilities resulting in an extension and an increase of potential liquidity of $450 million until July 2029.
Thus, its revolving credit facilities now totaled $1.5 billion. Notably, LATAM Airlines ended Q2 with a liquidity position of $3 billion, with its cash and cash equivalents being $1.
8 billion at the end of the quarter. The airline group's shares were delisted in June 2020 as it underwent Chapter 11 bankruptcy proceedings..
