LATAM Records $582 Million Profit in 2023, Driven by Strong Passenger Traffic

LATAM reported strong financial results for the fourth quarter of 2023 and the entire year. The 50.1% increase in traffic and $582 million profit is a testament to the carrier's strong financial and operational performance. 

Financial Background

Over 2023, LATAM reported $11.8 billion in revenue, 23.9% greater than its revenue in 2022. Additionally, LATAM reported an adjusted operating margin of 11.3%, meaning the airline profited $1.13 billion. When comparing 2022 and 2023 fourth-quarter results, it reported an 18.5% increase in revenue at $3.3 billion. Based on this data, LATAM's profits were 17.6%, further underscoring its financial growth.

Regarding LATAM's capital structure, it had $2.8 billion of liquidity in 2023, thanks to generating $498 million in cash over the period. The increase in liquidity makes it easier and more efficient for LATAM to turn the $2.8 billion in cash into necessary investments. Additionally, having more liquidity makes it easier for the airline to pay short-term debts. 

Operational Recovery and Growth

Four years after the devastating impacts of COVID-19, LATAM transported nearly 74 million passengers, similar to its 2019 levels. The airline's 2023 recovery is attributed to a massive 50.1% increase in both domestic and international traffic. Since LATAM flies to five of six inhabited continents, this is significant. Over the fourth quarter of 2023, LATAM consolidated operations and increased its seat capacity by 20.6% compared to 2022. 

This strength can be attributed to the airline receiving 30 aircraft, consisting of 25 narrowbodies and five widebodies. LATAM's increased fleet size from 120 to 150 represents a 25% increase, allowing it to launch 21 new routes, consisting of four domestic and 17 international routes. Four of the routes are operated by LATAM within the joint venture it has with Delta Air Lines. 

LATAM and Delta

LATAM and Delta announced a joint venture at the end of 2022, which benefitted both airlines and their passengers. The joint venture allows Delta and LATAM to pool their resources together to expand each other's route networks more easily and optimize their flight schedules and airport operations while keeping both separate identities. LATAM and Delta improved customer access to 300 destinations across North and South America, underscoring the "meant to be together" campaign tagline.

Their close relationship allowed both airlines to expand flights between North and South America. LATAM replaced one of Delta's daily flights from Lima (LIM) to Atlanta (ATL) in October 2023. Delta, on the other hand, introduced a second daily flight to Bogotá (BOG), introduced a new service to Cartagena (CTG), and resumed flights to Rio de Janeiro (GIG). All flights are from the carrier's Atlanta (ATL) hub, with the Rio de Janeiro route also offered from New York (JFK).

In addition to increased route networks, LATAM's onboard product also improved. It added a premium cabin to its fleet and equipped most planes with onboard WiFi. 65% of the narrowbody planes in its fleet are equipped with WiFi.