LATAM closes 2021 with continued revenue improvements, reduction in unit costs, and significant advances in the Chapter 11 process
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Santiago, Chile, March 09, 2022 - 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$5,111.3 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.