LATAM Airlines Group closed 2020 with $3 billion of available liquidity – $1.7 billion in available cash added to $1.3 billion in committed DIP financing line – in a year marked by travel restrictions and the sharp contraction in demand passengers due to COVID-19.

The group implemented an important cost reduction policy, reducing costs by 38.1% during the year compared to 2019.

In a press release, LATAM Airlines Group’s CEO, Roberto Alvo, commented that “2020 was the most challenging year in history for the aviation industry and for LATAM. Although the COVID-19 crisis had deep effects on the group and its operations, and will continue to do so for a while, this context has allowed us to make reform decisions. We will emerge as a closer, simpler, more agile and more efficient company. We have no doubts that when the crisis passes, LATAM will operate as a strengthened group.”

Revenue Declines, Partially Offset by Cargo Gains

During the last 2020 quarter, the carrier’s total revenues were $897.5 million, which represents 68.7% decline compared to the previous year.

This decline was partially offset by a 26.7% increase in cargo revenues, in response to the strong demand for these types of services during the pandemic.

On the other hand, operating costs fell 44.5% in the fourth 2020 quarter driven by lower passenger operations and the group’s efforts to reduce its fixed costs. The group ended the 2020 quarter with a $962.5 million loss.

As stated in diariofinanciero, in February, LATAM closed the month with an operating level of around 30%, only increasing to 38% in December.

With these results, the carrier closed the year with nearly $4.5 billion in losses.

In terms of revenue, the group reached up to $3.9 billion for the 2020 fiscal year, representing a decrease compared to the 61% obtained in 2019. These revenues correspond to a 69.9% decline in the passenger segment and a 13.7% rise in cargo.

Cancelled Aircraft Purchase, Other Savings

Outside its operating performance, LATAM Airlines Group noted a payment received from Delta Air Lines totalling $62 million. The payment was compensation for Delta cancelling its purchase of four Airbus A350 aircraft, which were included within the strategic alliance that the airlines signed prior to the pandemic.

LATAM Airlines Group also agreed with each of its aircraft suppliers to pay only for the hours flown by each aircraft as long as the COVID-19 pandemic continues.