In March, LATAM Airlines Group expects just one-third of the passengers it had in 2019, prior to the COVID-19 pandemic. This shows the impact that the crisis has had on the South American giant.
How much has the crisis crippled LATAM?
LATAM Airlines Group is the largest airline company in Latin America. With over 300 planes and a presence in most South American countries, LATAM averaged more than 70 million annual passengers before the COVID-19 pandemic.
In 2020, the airline lost 61.9% of its traffic compared to the previous year. It went from carrying 74.18 million travelers in 2019 to 28.29 million. This led to LATAM posting a net loss of US$4.54 billion and a 70% decrease in passenger revenues.
Currently, LATAM Airlines Group is under a Chapter 11 bankruptcy. It received a promised DIP Funding of US$2.45 billion and has withdrawn half of it.
Due to the current uncertainty in the commercial passenger business, LATAM has heavily relied on cargo.
While passenger revenues dropped, cargo surged 13.7% due to the increase in e-commerce in Latin America. Therefore, LATAM is betting on this market and recently announced the conversion of up to eight Boeing 767 into freighters. This plan will boost LATAM’s cargo capacity by 80%; by 2023, the airline should have a fleet of 19 Boeing 767 freighters.
What can we expect for March?
2021’s first quarter has proved challenging for LATAM. The airline started operating at a 40% capacity (compared to January 2020, before the COVID-19 pandemic), but since it has gone down.
In February, LATAM operated at a 35% capacity, claiming that the reduction was due to the uncertainty and travel restrictions worldwide. That month, the company operated approximately 680 flights per day, connecting 115 destinations in 16 countries. Additionally, it had over 1,100 cargo flights during the month.
For March, the planning remains relatively similar. LATAM is operating at 35% capacity compared to March 2019 (by this time last year, South America was already closing down in a failed attempt to stop the COVID-19 pandemic).
The carrier will operate 675 daily flights to 115 destinations in 16 countries, said LATAM in a statement. The cargo fleet will also have more than 1,100 flights in March, a 13% increase compared to the same period in 2019.
Nevertheless, everything is subject to change, depending on how the COVID-19 pandemic evolves in the region.
Going country by country
Currently, LATAM operates domestic flights in five South American countries. These are Brazil, Chile, Colombia, Ecuador, and Peru. In 2020, it ceased operations in Argentina due to the lack of certainty going forward.
Of these five countries, LATAM has had the best recovery in Colombia. Meanwhile, the worst recovery is in Ecuador.
- Brazil. LATAM will operate 39% of March’s 2019 capacity. The domestic market is at 65% of capacity while the international at 16%. The airline will fly on 92 domestic routes (346 daily flights) and 11 international.
- Chile. LATAM will operate 28% of March’s 2019 capacity. The domestic market has recovered by half, while the international is only at 20% of two years ago. LATAM will fly 18 domestic routes (84 daily flights) and 12 international.
- Colombia. LATAM will operate at 58% of March’s 2019 capacity. The domestic recovery has been incredible, as it is currently at 90% of the pre-pandemic levels. Meanwhile, the international is at 26%. LATAM currently flies 24 domestic routes (107 daily flights) and two international.
- Ecuador. LATAM will operate at 23% of March’s 2019 capacity. The domestic market is at 52% of capacity while the international is at 14%. It has six domestic routes (16 daily flights) and three international.
- Peru. LATAM will operate at 29% of March’s 2019 capacity. The airline has a 48% domestic and 23% international capacity in this country. It flies 18 domestic routes and 15 international.
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