Chilean carrier LATAM Airlines raised its earnings forecasts for the year on Thursday, citing a strong first-quarter performance and increased demand.
LATAM now expects revenues for the year to range from $12.8 billion to $13.1 billion, up from the previous estimate of $12.4 billion to $12.8 billion. The adjusted EBITDAR for the year is estimated at a record $2.75 billion to $3.0 billion, a 10% to 22% increase from 2023. This is higher than the previous estimate of between $2.6 billion and $2.9 billion in December.
The airline attributed the improved outlook to boosted operations, cost-containment measures, and an improved capital structure. In the first quarter, LATAM reported $796 million in EBITDAR and a net profit of $258 million, more than double the previous year, from revenues of $3.32 billion, an 18% increase.
LATAM also saw a 17.5% growth in passenger traffic, as measured by available seat kilometers (ASK), surpassing the pre-pandemic capacity logged in 2019. The increase was attributed to a record number of passengers and higher occupation levels on flights.
Despite these gains, LATAM’s passenger costs remained steady in the quarter at 4.3 cents per ASK, while the carrier generated $137 million in cash. Chief Financial Officer Ramiro Alfonsin stated that LATAM’s liquidity allows it to be competitive, grow steadily, take on new projects calmly, and obtain better terms with providers.
The carrier, currently operating a 330-plane fleet, is expecting several aircraft deliveries this year. LATAM Airlines recently announced it was no longer seeking to acquire Boeing B737 planes, opting to look for alternative narrowbody aircraft after failed talks. Alfonsin mentioned that LATAM was considering Airbus’ A320 or A321 aircraft but remained open to alternatives.
Looking ahead, Alfonsin stated that LATAM plans to deleverage “more than expected” after closing the quarter with a financial net debt to adjusted EBITDAR ratio of 1.9 times. He also mentioned that the firm was contemplating a debt refinancing later this year.
Also Read, Bitcoin Transaction Fees Return to Ethereum Levels After Runes Launch Frenzy
Nigerian Court Adjourns Money Laundering Trial Involving Binance and Executives
Bookmark and Follow us for More Business News
