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LATAM Reports Q1 Net Loss of $431 Million on 61 Percent Revenue Decline to $913 Million

LATAM Airlines Group has reported a first quarter 2021 net loss of $431 million on a year-over-year decline in revenue of 61 percent to $913 million. The Group ended the quarter with $1.3 billion in cash and equivalents and $1.3 million in committed DIP financing.

LATAM Airbus A320neo - Courtesy Airbus

On Thursday (May 6, 2021), LATAM Airlines Group S.A. reported their first quarter 2021 financial results for the period ending March 31, 2021. The Group reported a first quarter net loss of $431 million on a year-over-year revenue decline of 61 percent to $913 million. Reduced passenger revenue was partially offset by a 37 percent increase in cargo revenue to $345 million versus the same period last year. During the first quarter, LATAM announced that they will convert up to eight Boeing 767-300 passenger aircraft into freighters over the next three years, increasing the carrier’s cargo capacity by up to 80 percent. At March 31, 2021, the Group had $2.6 billion in total liquidity, including $1.3 billion is cash and cash equivalents and $1.3 billion in committed DIP financing.

In Thursday’s announcement, LATAM Airlines Group’s CEO, Roberto Alvo, said,

“One year after the start of the pandemic and with a vaccination process underway, the profound impact of the crisis remains. We believe that the correct decisions have been made to ensure the continuity of the group and we are already witnessing the effects. We ended a very difficult first quarter with healthy liquidity levels and a significant cost reduction. The call to action is to continue working as we have done so far because the pandemic and its impact is not over yet.”

LATAM's First Quarter 2021 Consolidated Financial Results - Courtesy LATAM

Operating expenses during the first quarter declined year-over-year by 44 percent to $1.27 billion, attributable to a decrease in passenger operations as well as the company’s continued efforts to reduce fixed costs. The decline in operating expenses also includes a 42 percent reduction in wages and benefits compared to the first quarter last year, resulting from a 32 percent headcount reduction.

As part of airline’s ongoing fleet negotiations, LATAM announced the retirement of its Airbus A350s and will consolidate long-haul operations with a more unified widebody fleet consisting of Boeing 767, 777 and 787s. On April 29, 2021, LATAM and Boeing amended the carrier’s purchase agreements, whereby orders for four 787s and one 777F were terminated. LATAM has retained purchase orders for two 787-9s which are expected to be delivered in December 2021.

LATAM Airlines Group is the leading airline group in Latin America, offering service to five domestic markets (Brazil, Chile, Colombia, Ecuador and Peru) as well as international service to Europe, the United States and the Caribbean. The Group operates a fleet of Boeing 767, 777 and 787s and Airbus A319, A320, A320neo, A321 and A350s. LATAM Airlines Group’s shares are traded on the Santiago de Chile stock exchange and its ADRs are traded on the over-the-counter markets in the U.S.

Source: LATAM Airlines Group


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