LATAM said demand has remained strong across both passenger and cargo markets despite higher fuel prices linked to the Middle East conflict, with management pointing to accelerating revenues, rational industry capacity and continued pricing traction.
Speaking at the JPMorgan conference last week, chief executive Roberto Alvo said LATAM had seen “no impact” on demand in recent weeks and, in some segments, had seen revenues accelerate. He said the industry had been active in passing higher fuel costs through to fares, particularly in key markets such as Brazil.
Alvo said LATAM’s exposure to premium, corporate and premium leisure traffic continued to support performance, highlighting that while the group has about 40% domestic capacity share in Brazil, it holds closer to 50% share in the corporate segment.
He also said the competitive environment in Latin America remains rational, with carriers focused on profitability and some rivals trimming marginal flying as fuel prices rise. In Brazil, Alvo said the market had already seen four fare increases since the conflict began.
On fuel hedging, LATAM said it continues to hedge around 40% of consumption through options and collars, although management stressed the policy is designed to protect within a range rather than fully offset sharp price spikes.
Alvo said LATAM had kept ex-fuel unit costs broadly flat since 2019 and, adjusting for inflation and exchange rates, had reduced cost per ASK materially, with technology and data use now a major focus for further efficiency gains.
On fleet, LATAM said it expects 41 aircraft deliveries this year, including 12 Embraer E2s, 26 A320-family aircraft and three Boeing 787s, with supply chain and engine issues improving although not yet fully resolved. Management said the E2 should support new routes, more frequency on smaller markets and, over time, replacement of older A319s.
Cargo, which accounts for about 13% of group revenues, was also flagged as a relative beneficiary of current disruption, with Alvo pointing to tighter global freight capacity and possible spillover from seafreight constraints.
Looking ahead, LATAM said it remains focused on maintaining a strong balance sheet, investing in the business and returning excess capital to shareholders, while management argued the group is well positioned to continue outgrowing the wider Latin American market over the medium term.