LATAM Airlines expects record earnings, higher traffic in 2024

By Kylie Madry

MEXICO CITY (Reuters) -LATAM Airlines projected on Thursday record earnings for next year of between $2.6 billion and $2.9 billion as passenger numbers grow and it reduces its debt load after coming out of bankruptcy last year.

The expected record earnings, measured in adjusted earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR), would top the maximum expected for this year of $2.5 billion.

“We welcome today’s announcement, which should be well received by the market,” analysts at J.P. Morgan said in a note to clients.

The airline also expects passenger growth of between 12% and 14% next year, topping 2019’s growth rate within the first quarter and estimates revenues of $12.4 billion to $12.8 billion.

Passenger growth, as measured in the metric of available seat kilometers, is also expected to increase between 7% and 9% in Brazil’s domestic market, the carrier added.

The group’s cargo subsidiaries expect growth of between 10% to 12% in their operations, as measured in available ton kilometers, next year.

LATAM also estimates it will close 2024 with net leverage of between 1.8 and 2.0 times, “which represents an approximate 50% reduction from its leverage level following its successful exit from the Chapter 11 restructuring process,” the carrier said in a statement.

The airline also expects to end 2024 with between $2.8 billion and $3.0 billion in liquidity, “as well as maintaining its solid capital structure,” it said.

Late last year, LATAM came out of pandemic-related bankruptcy proceedings with an $8 billion reorganization plan.

Before bankruptcy, Chile-based LATAM had also traded American Depository Receipts (ADRs) on the New York Stock Exchange.

The company’s intention to re-list in New York “should be another relevant trigger to stimulate foreign investors’ attention,” the J.P. Morgan analysts said, “although timing is still uncertain.”