LATAM Airlines Group SA Sponsored ADR ((LTM)) has held its Q4 earnings call. Read on for the main highlights of the call.
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LATAM Airlines’ latest earnings call radiates a strong positive sentiment, underscored by record passenger growth, robust financial results, operational excellence, and notable sustainability milestones. The company candidly addressed challenges such as revenue per ASK declines and engine supply chain issues, yet the overall outlook remains optimistic.
Record Passenger Growth
In 2024, LATAM Airlines transported a record-breaking 82 million passengers, marking an impressive 15% growth compared to the previous year. This achievement solidifies LATAM’s position as the largest airline group in South America, showcasing its capacity to expand and meet increasing travel demands.
Strong Financial Performance
LATAM Airlines reported a commendable adjusted operating margin of 12.7% and an adjusted EBITDAR of $3.1 billion for 2024. Furthermore, the net income nearly doubled to $977 million compared to the previous year, reflecting the company’s strong financial health and strategic management.
Operational Excellence and Customer Satisfaction
The airline reached its highest-ever Net Promoter Score of 51 points, with a standout 56 points for Premium passengers. LATAM also achieved the lowest rate of customer complaints in key markets such as Chile, Brazil, and Peru, underscoring its commitment to customer satisfaction and service quality.
Sustainability Achievements
LATAM’s commitment to sustainability was recognized as it was reincorporated into the Dow Jones Sustainability Index and ranked as the fifth most sustainable airline group worldwide. This recognition highlights LATAM’s leadership in sustainability in the Americas and the Western Hemisphere.
Revenue per ASK Decline
Despite its successes, LATAM faced a 10% year-over-year decrease in consolidated revenues per ASK, attributed to a decline in jet fuel prices and currency depreciation in major markets like Brazil. This decline poses a challenge that the company is addressing strategically.
Engine Supply Chain Challenges
LATAM is currently tackling issues with aircraft grounded due to engine supply chain challenges from Pratt & Whitney and Rolls-Royce. These challenges impact fleet availability but are being managed to minimize disruption to operations.
Forward-Looking Guidance
Looking ahead, LATAM Airlines projects a capacity growth of 7% to 9% for 2025, with revenues anticipated to reach between $14 billion and $14.5 billion. The company maintains a liquidity level at 27% of the last 12 months’ revenues, with an adjusted net leverage at 1.7x. The guidance for 2025 includes an adjusted EBITDAR forecast of $3.25 billion to $3.6 billion, supported by a healthy demand environment and disciplined cost management.
In summary, LATAM Airlines’ earnings call conveyed a positive sentiment with multiple achievements in passenger growth, financial performance, customer satisfaction, and sustainability. While challenges such as revenue per ASK declines and supply chain issues persist, the company’s forward-looking guidance shows confidence in continued growth and operational excellence.
