LATAM Airlines Group has announced it expects a 20% growth in the number of cargo and passenger operations in 2023, plus launching 38 new routes compared to pre-pandemic levels, including a couple that will be opened through its Joint Venture Agreement with Delta Air Lines.
More routes, more capacity
On Thursday, LATAM Airlines released its 2022 financial results. The South American company said that it carried about 62 million passengers last year, which represented a 22 million passengers increase versus 2021, and closed the year operating to 144 destinations in 22 countries, in line with the number of destinations served at the end of 2019, prior to the COVID-19 pandemic. The company closed the year operating at about 83.2% of 2019 levels (measured in Available Seat Kilometer, ASK). The airline is nearing a full recovery.
By 2023, LATAM Group expects annual growth in its passenger and cargo operations of more than 20% compared to 2022. Additionally, this year the Group will fly 38 routes that it did not operate in 2019, among which two are part of the Joint Venture Agreement with Delta. These two routes are São Paulo Guarulhos-Los Angeles and Bogota-Orlando.
LATAM Airlines also plans to take 15 new aircraft this year, including the company’s first-ever Airbus A321neo.
The strength of LATAM’s Joint Venture with Delta Air Lines
In terms of connectivity, last year was great for LATAM Airlines Group. The company implemented a new joint venture with Delta Air Lines. This has allowed passengers to access more than 300 destinations between the US and Canada and six countries across South America (Brazil, Chile, Colombia, Paraguay, Peru, and Uruguay).
In July 2023, LATAM Brasil will operate the Los Angeles-Sao Paulo route, and LATAM Colombia will launch the service Orlando-Bogota. The Colombian branch expects to carry about 120,000 passengers a year, offering better connection alternatives from within Colombia and Ecuador to the east coast of the United States through Delta’s hub in Orlando.
Roberto Alvo, Chief Executive Officer of LATAM Airlines Group, said in a statement,
“The results of 2022 show a strengthened group and more competitive than before the pandemic. During the year, LATAM Group made significant progress in different areas. The network was expanded through the alliance with Delta, and new routes were launched, the cargo business was strengthened, and the service for customers was improved.”
Financial results
During the four quarter, LATAM Airlines had total operating revenues of $2.74 billion, while operating expenses were $2.6 billion due to a 51.5% increase in jet fuel versus 2021.
As a result, LATAM Airlines Group reported $139.7 million in operating income for an operating margin of 5.1%. The group had a net income of $2.5 billion in the fourth quarter and a full-year net income of $1.3 billion.
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In relation to the pre-pandemic period, the group managed to reduce its gross debt by 37.5% going from $10. 4 billion before the company’s Chapter 11 bankruptcy process to $6.5 billion at the end of last year. Additionally, LATAM increased its liquidity by 78%, reaching $2.3 billion.
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