LATAM Airlines Group (LTM) Q3 2024 earnings summary

Executive summary

• Achieved strong operational and financial performance in Q3 2024, with capacity up 15.1% and 21.1 million passengers transported, a 7.1% increase year-over-year.

• Net income reached $301 million for the quarter, with adjusted operating margin at 14.0% and total operating revenues up 7.6% year-over-year to $3.3 billion.

• Celebrated return to the NYSE and hosted first Investor Day, emphasizing operational excellence, network strength, and financial discipline.

• Updated 2024 guidance for the second time, reflecting improved margins, higher Adj. EBITDAR targets, and strong demand.

• Maintained focus on cost efficiency and financial discipline, supporting profitable growth and resilience to business cyclicality.

Financial highlights

• Adjusted EBITDAR reached $828 million (25.2% margin), up 14% year-over-year; net income for the quarter was $301 million, with YTD net income at $705 million, a 41.3% increase year-over-year.

• Revenues grew 7.6% year-over-year to $3.29 billion; passenger revenue up 6.3%, cargo up 15.7%.

• Adjusted passenger CASK ex-fuel decreased by 8.5% year-over-year to $0.04.

• Positive cash flow generation of $157 million in Q3 2024, raising liquidity to $3.6 billion.

• Consolidated revenues per SK decreased 7.7%, influenced by lower jet fuel prices, currency depreciation, and a shift in business mix.

Outlook and guidance

• 2024 adjusted EBITDAR guidance raised to $3.00–$3.15 billion, with ASK growth of 15–16% year-over-year.

• Adjusted passenger unit cost ex-fuel expected at $4.2–$4.3 cents, lower than prior projections.

• Adjusted net leverage ratio forecasted at 1.6–1.7x by year-end.

• Anticipates a strong end to 2024 and a favorable position entering 2025.

• Guidance updated for the second time in 2024 due to strong demand, additional capacity, and cost containment.