LATAM Airlines Group S.A., encompassing its various subsidiaries, specializes in providing both passenger and freight air transport services. The company's vast operational ...
LATAM Airlines Group S.A. (NYSE: LTM) is a major airline holding company headquartered in Santiago, Chile. The group operates passenger and cargo services under the LATAM brand and works through an integrated network that connects destinations across Latin America and beyond. The company’s operational footprint spans multiple countries including Chile, ...LATAM Airlines Group S.A. (NYSE: LTM) is a major airline holding company headquartered in Santiago, Chile. The group operates passenger and cargo services under the LATAM brand and works through an integrated network that connects destinations across Latin America and beyond. The company’s operational footprint spans multiple countries including Chile, Peru, Ecuador, Colombia, Brazil and other Latin American markets, with connectivity extending to North America, Europe, the Caribbean, and Oceania.
Business model and services: LATAM’s core business is air transportation—carrying passengers and transporting freight through a fleet of aircraft. In addition to flight operations, the group supports its value chain with complementary services that help improve reliability and customer experience, including ground handling, logistics solutions/courier delivery, and aircraft maintenance. This combination matters in an airline industry where turnaround time, operational resilience, and fleet availability directly affect costs and on-time performance.
Network and capacity: The group’s network is large in terms of both passenger routes and cargo reach. As described in the provided materials, LATAM serves passenger travel across 148 destinations in 26 countries, and its cargo operations reach 166 destinations across 33 nations, supported by a fleet numbering in the hundreds of aircraft. Such scale typically requires sophisticated scheduling, fleet planning, crew management, and demand/route optimization.
Cost structure and “BOM” considerations: While airlines do not publish bill-of-materials in the same way as manufacturers, their “inputs” are effectively their major cost drivers. For LATAM, key cost elements generally include fuel, aircraft lease and/or ownership costs, airport/ATC fees, labor and crew costs, maintenance and spare parts, and subcontracted ground/logistics services. Maintenance and spares are especially important because aircraft uptime determines capacity and directly impacts revenue generation.
Financial/market context (high level): Based on the provided FMP snapshot (TTM/market metrics), the company has a large enterprise value and shows typical airline financial characteristics with ongoing capital expenditure and fleet-related investment cycles. These metrics reflect the market’s expectations for cash generation and margins in a capital-intensive sector.
Key people and governance: Roberto Alvo is LATAM’s Chief Executive Officer (CEO), a role he has held since March 31, 2020 according to the provided executive management information.
Operations and customer-facing ecosystem: LATAM also emphasizes customer connectivity through its brands, frequent-flyer program (LATAM Pass), and online booking channels (e.g., latam.com) that bundle flights with travel-related services such as hotels and car rentals, supporting demand generation and customer retention.
Founded/reorganization context: Although LATAM Airlines Group S.A. dates to the post-merger/brand formation era (founded in 2012 following the LAN and TAM association), the underlying airline histories extend back decades, and the group has undergone corporate and industry reorganization in response to market events.
YoYYoY means Year-over-Year. It compares the latest annual value with the previous annual value to show long-term trend strength.
QoQQoQ means Quarter-over-Quarter. It compares the latest quarter with the immediately previous quarter to show short-term momentum changes.
RevenueThe total money that came through the front door from selling things, before paying a single bill. Think of it as the grand total of every credit card swipe from customers. (YoY compares this year to last year's performance, while QoQ compares the current three months to the previous three).
$14.3B
+11.2%
+1.1%
Net IncomeThe absolute bottom line. If the company paid every single supplier, employee, banker, and tax collector, this is the actual money left in their pocket at the end of the day.
$1.5B
+49.4%
-78.3%
Gross MarginThe basic markup. If they sell a $100 pair of sneakers, this percentage tells you how much of that price tag is profit right after paying for the rubber and shoelaces, but before paying for things like store rent or TV commercials.
+29.2%
+14.6%
-48.0%
Operating MarginThe 'day job' efficiency score. Out of every dollar a customer spends, this shows how many cents the company keeps after making the product AND paying for all the everyday corporate overhead (like salaries, marketing, and keeping the lights on).
+16.4%
+36.3%
-72.6%
Net MarginThe final take-home percentage. When you strip away every conceivable cost, tax, and interest payment, this is the exact number of cents the company truly gets to keep from every dollar in sales.
+10.2%
+34.4%
-78.5%
Free Cash FlowThe holy grail of corporate cash. It's the spendable, physical money left over after the business pays for its daily operations AND buys the big, expensive upgrades (like new factories or servers) it needs to survive. This is the 'free' money they can use to pay dividends or buy back stock.
$1.5B
-11.8%
-62.8%
FCF MarginThe ultimate cash conversion rate. It shows how good the company is at turning regular sales directly into cold, hard, spendable cash. A high percentage means the business is an absolute cash-printing machine.
+10.4%
-20.7%
-63.2%
Debt / EquityThe financial risk gauge. It compares how much of the company's empire was built using borrowed money (loans) versus the owners' own money (shareholders). A high number means they are heavily leveraged and playing a riskier game; a low number means they are playing it safe.
601.1%
-39.2%
+3.9%
Current RatioThe 12-month survival check. It simply compares the cash they have right now (plus things they can quickly turn into cash) against the immediate bills they absolutely must pay this year. A score above 1 means they have enough in the wallet to cover the upcoming bills without panicking.
0.60x
-3.1%
+0.4%
Total AssetsThe absolute size of the company's empire. It bundles together absolutely everything of value they own—from the cash in the register and the inventory in the warehouse, to the software patents in the vault and the factories on the ground.
Operator: Hello, everyone. Thank you for joining us, and welcome to the Second Quarter 2026 LATAM Airlines Group Earnings Conference Call. [Operator Instructions] Before I turn the call over to the management, I'd like to remind you that certain statements in this presentation and during the Q&A may relate to future events and expectations and as such, constitute forward-looking statements. Any matters discussed today that are not historical facts, particularly comments regarding the company's future plans, objectives and expected performance or guidance are forward-looking statements. These statements are based on a range of assumptions that LATAM believes are reasonable, but are subject to uncertainties and risks that are discussed in detail in the published 20-F 2026 guidance earnings release, financial statements and related CMF and SEC filings. The company's actual results may differ significantly from those projected or suggested in any forward-looking statements due to a variety of factors, which are discussed in detail in our SEC filings. And if there are any members of the press on the call, please note that for the media, this is a listen-only call. I will now hand the conference over to Ricardo Bottas, CFO. Mr. Bottas, please go ahead.
Ricardo Dourado: Thank you. Hello, everyone, and good morning. Welcome to our second quarter 2026 conference, and thank you all for joining us today. Here with me is Roberto Alvo, our CEO; Andres Del Valle, Corporate Finance Director; and Tori Creighton, Head of Investor Relations, and we will present the highlights and results for the second quarter 2026. I will hand it over to Roberto to share his opening remarks. Roberto?
Roberto Alvo Milosawlewitsch: Good morning, and thank you, Ricardo. The second quarter of 2026 was an important demonstration of the resilience of LATAM Group's business model. During this period, the industry faced one of the sharpest increases in jet fuel prices in recent years, creating a significant cost headwind across the sector. As we estimated back in May alongside our first quarter publication, the impact of higher jet fuel prices was in excess of $700 million in addition to -- in the second quarter alone. Yet despite this environment, LATAM delivered profitable results, reflecting an adjusted operating margin of 5.4%, which was also on the higher end of the estimate that we had made of mid- to low single digits back then. These results are not explained by a single initiative. They are the outcome of a business that has been consistently strengthened over the last several years to perform across different environments, which starts with a dedicated effort to care for our customers, constantly improving their experience and making them willing to experience LATAM. In addition to this, a diversified business structure integrating our passenger, cargo and LATAM Pass businesses, together with an effective commercial strategy, a competitive cost structure, a strong balance …