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A LATAM Airlines Boeing 787-9 departing LAX (Photo: AirlineGeeks | James Dinsdale)

LATAM Closes Second Quarter with $2.3 Billion in Liquidity

This Monday, the LATAM Airlines Group reported that it foresees better operational prospects for the next six months, despite the profound impact of the pandemic in Latin America so far this year.

In a press release, the group stated that it plans to reach a capacity greater than 50% of its pre-pandemic operations, measured in available seat kilometers, by the end of the third quarter of 2021, which would represent the highest level within the LATAM Airlines Group operation since the pandemic began.

In addition, the group reported that it ended the second quarter with $2.3 billion of available liquidity, $1.5 billion in cash and $800 million in a committed debtor-in-possession (DIP) financing line.

In the second quarter of 2021, total revenues totaled $888.7 million, which implied a drop of 62.5% compared to the second quarter in 2019. Passenger revenues decreased 77.4%, the impact of which was partially offset by an increase of 37.5% in cargo revenues, both compared to the same period in 2019.

LATAM Airlines’ Cargo operations continue to stand out for their contribution to the group, reaching revenues of $370.2 million during the quarter, mainly driven by cargo planes that reached historical utilization levels after a strong import and export backdrop propelled demand.

For their part, costs decreased 46.5% in relation to the same period of 2019, reaching $1.246 billion. The effort made by the group to reduce and vary its fixed costs is noteworthy. That effort led to an operating loss of $357.7 million in the second quarter.

LATAM’s Sustainability Strategy

A notable event of the period, and which is related to the projection of the LATAM Airlines 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 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.

As previously announced, the group resumed its recycling activities, 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, which will be extended to other subsidiaries of the group during 2021.

In addition, the group recently announced the formalization of alliances between its “Avión Solidario” program and various foundations and organizations in both Chile and Brazil.

In the first case, LATAM Airlines Chile is working with DKMS, Coaniquem,”América Solidaria, TECHO, Minsal and Fundación Fútbol Más. Regarding Brazil, the group has new alliances with the Brazilian Association for the Defense of Women, Children and Youth (Asbrad), Burning Support Institute, National Civil Defense and the Brazilian Institute for the Environment and Renewable Natural Resources.

Author

  • The three things Juan loves most about aviation are aircraft, airports, and traveling thousands of miles in just a few hours. What he enjoys the most about aviation is that it is easier and cheaper to travel around the world and this gives you the opportunity to visit places you thought were too far away. He has traveled to different destinations in North, Central, South America and Asia. Born, raised and still living in Perú, Juan is a lawyer, soccer lover, foodie, passionate traveler, dog lover, millennial and curious by nature.

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