LATAM Airlines Group S.A.

LATAM said Q2 2026 total revenue rose almost 28% year over year to nearly $4.2 billion. Adjusted operating margin was 5.4%, passenger revenue grew 28%, cargo revenue grew almost 22%, and the company posted positive net income of $125 million. Consolidated capacity increased 8.9%, load factor was 82%, passenger RASK increased 17.5%, and passenger CASK ex fuel was $0.045. On fuel, the all-in average fuel price including hedge increased by more than 80% year over year and total fuel costs increased 93%. For 2026, LATAM now expects capacity growth of 9% to 10%, revenue of $17.3 billion to $17.7 billion, adjusted EBITDA of $4.1 billion to $4.4 billion, passenger CASK ex fuel of $0.045 to $0.047, liquidity of at least $4.7 billion, and adjusted net leverage at or below 1.6x.

CEO Roberto Alvo framed the quarter as proof of the resilience of LATAM’s model in an unusually difficult fuel environment. He emphasized that the company used its diversified passenger, cargo, and loyalty businesses, plus commercial actions and operational flexibility, to protect profitability and preserve demand. His tone was cautious on near-term fuel volatility but confident that the business is better prepared and that the second half should be seasonally stronger.

CFO Ricardo Dourado focused on the numbers behind the quarter and the updated outlook. He said fuel costs were the main headwind, with total fuel costs up 93% and the all-in fuel price up more than 80% year over year, but the company still generated $476 million of adjusted operating cash flow and ended with a positive net cash variation of $110 million. He highlighted liquidity of more than $4.2 billion, adjusted net leverage of 1.5x, and the new share repurchase program approved for up to 5% of shares over no more than 5 years. He also pointed to revised 2026 assumptions for fuel of $147 per barrel in Q3 and $130 per barrel in Q4, versus the prior $170 and $150 assumptions.

Analysts pressed on International demand, the tax credit, 2027 capacity, hedging losses, Brazil competition, the E2 deployment, dividend policy, and year-end leverage. Management said International was solid across regions, with Europe strong, some improvement on South America-U.S. traffic, Argentina somewhat weaker, and World Cup timing dampening June demand. On the hedge, Ricardo said the negative result came from premiums paid on added call options, and that Q3 should see lower premiums because the level of calls is now lower. On capital allocation, management said growth is the first priority, then financial policy, and then any excess cash can go to dividends, buybacks, or debt actions.