Fuel Costs Nearly Halve LATAM’s Quarterly Profit While Revenue Climbs 28%

Adjusted operating margin fell to 5.4% from 12.9% a year earlier

LATAM Airlines Group (NYSE: LTM; Santiago Stock Exchange: LTM) reported net income of $125 million USD for the second quarter of 2026, down 48.2% from the same period a year earlier, even as revenue rose almost 28%. The Santiago-based group published the results on August 4, 2026.

Revenue reached $4.18 billion USD, up 27.6% from $3.28 billion USD in the second quarter of 2025. Adjusted operating income fell 46.3% to $227 million USD, and the adjusted operating margin narrowed to 5.4% from 12.9%. Adjusted EBITDA totaled $713 million USD, down 16.1%.

Aircraft fuel costs rose 93.1% to $1.71 billion USD, an increase LATAM attributed in its earnings report to jet fuel prices driven higher by geopolitical tensions in the Middle East. The average all-in price the group paid, including hedges, rose 81.3% to $194.50 USD per barrel, while consumption rose 6.8%.

“The second-quarter results demonstrate the group’s structural strength, the value proposition offered to customers and its ability to operate in a volatile and uncertain environment,” said Ricardo Bottas, chief financial officer of LATAM Airlines Group. He added: “The group remains firmly committed to the disciplined execution of a profitable growth strategy. LATAM’s diversified business model — which includes revenue from the Premium segment, integrated cargo and loyalty businesses, and a strong financial position — provided the foundation for maintaining profitability even during a seasonally weaker quarter and amid unprecedented fuel-price pressures that had a significant impact on the group’s costs.”

Passenger revenue rose 27.9% to $3.61 billion USD, which LATAM said showed its ability to “pass through higher fuel costs to fares without compromising demand.” Passenger unit revenue rose 17.5% to 8.1 US cents even though capacity grew 8.9%. The premium segment produced 29% of passenger revenue. Cargo revenue rose 21.8% to $510 million USD on 17.8% higher yields, and the group moved 261,000 tons. LATAM Pass reached 56 million members, who accounted for 67% of passenger revenue.

LATAM operates domestic airlines in Brazil, Chile, Colombia, Ecuador and Peru. It filed for Chapter 11 bankruptcy protection in May 2020, emerged on November 3, 2022, and relisted its American depositary receipts on the New York Stock Exchange in July 2024. Its Colombian subsidiary operates inside a joint venture with Delta Air Lines (NYSE: DAL) that Colombia’s Aeronáutica Civil (Civil Aeronautics), or Aerocivil, approved without conditions in May 2021.

In Colombia, LATAM Carried 5.2 Million Passengers in the First Half

LATAM Airlines Colombia said the group carried 5.2 million passengers during the first half of 2026 across its domestic network and on international routes to and from the country. Bogotá–Medellín remained the busiest domestic route, at 754,925 passengers, up 4% from the first half of 2025. Bogotá–Cartagena grew 11% and Bogotá–Barranquilla 10%. Bogotá–Montería grew fastest, at 27%. On international routes to and from Colombia, the airline reported growth of 46% to Brazil through the São Paulo hub and 18% to Orlando, both against the first half of 2025.

LATAM Restores Its 2026 Outlook but Trims Spanish-Speaking Capacity Growth

LATAM restored every parameter of its 2026 outlook, capacity and revenue among them, and raised its revenue range to $17.3 billion USD to $17.7 billion USD from the $15.5 billion USD to $16.0 billion USD it issued in December 2025. Adjusted EBITDA guidance of $4.1 billion USD to $4.4 billion USD sits above the $3.8 billion USD to $4.2 billion USD range set in May 2026, but below December’s $4.2 billion USD to $4.6 billion USD. Adjusted operating margin guidance stands at 12% to 13%, against an original 15% to 17%. The company assumes jet fuel at $147 USD per barrel in the third quarter and $130 USD in the fourth.

Capacity guidance moved in two directions. For the four Spanish-speaking domestic markets LATAM serves — Chile, Colombia, Ecuador and Peru — the group cut full-year growth to 4% to 5%, from the 5% to 7% it issued in December 2025; capacity across those four countries grew 5.3% during the second quarter. Guidance for Brazilian domestic capacity rose, to 8% to 9% from 6% to 8%, and group-wide capacity growth guidance narrowed to 9% to 10% from 8% to 10%.

Liquidity Reaches $4.23 Billion USD and Shareholders Back a Buyback

The group generated $476 million USD in adjusted operating cash flow and ended the quarter with $2.65 billion USD in cash. Including undrawn committed credit lines, liquidity stood at $4.23 billion USD, or 26.2% of revenue over the previous 12 months. Adjusted net leverage held at 1.5 times, below the 2.0 times ceiling set in the company’s financial policy. At an extraordinary shareholders’ meeting on August 3, 2026, shareholders approved the repurchase of up to 5% of subscribed and paid shares over as long as five years, delegating the launch, mechanism and conditions to the board of directors.

LATAM Expects 28 More Aircraft and Its Brazil Unit Maps the E2 Network

LATAM took delivery of nine aircraft and ended the quarter with a fleet of 383, comprising 304 Airbus (Euronext Paris: AIR) jets and 79 Boeing (NYSE: BA) aircraft, 20 of them freighters. The group expects 28 more deliveries over the rest of the year.

LATAM Airlines Brazil separately set out the first deployment of its Embraer (NYSE: EMBJ) E195-E2 fleet. Through March 2027, up to 14 of the jets are expected to operate 42 domestic routes, eight of them new: four linking Guarulhos with the new destinations of Cabo Frio, Macaé, Ji-Paraná and Rondonópolis, plus four connecting existing bases. LATAM Airlines Brazil will then serve 67 domestic destinations, against 44 in 2019, and is evaluating up to 18 more for a second phase in 2027.