Grupo Latam has had a gradual recovery in its operation during the second quarter. The Chilean airline reached 72.6 percent capacity (measured in ASK) compared to 2019. This figure represents more than double the capacity of the same quarter of 2021 and comes in a context marked by increased fuel prices, so it maintains “cautious optimism.”
“We closed a second quarter with significant progress in our Chapter 11 reorganization process and expected to exit this during the last quarter of this year. Although the group has progressed in active recovery, we remain cautiously optimistic about the coming months. We will closely monitor fuel prices and macroeconomic variables, as the industry is still in a very dynamic environment,” said Roberto Alvo, Latam’s CEO, in a statement.
During the period, the group’s total operating revenues reached US$2.226 billion, just 6.1 percent less than 2019, but registered an increase of 150.5 percent over last year. Meanwhile, costs increased 3.5 percent over the same quarter of 2019, driven by a 31.5 percent increase in the fuel cost line compared to the same period of 2019. At the end of the second quarter, Latam had losses of US$523.2 million.
Grupo Latam achieved approval of its Plan of Reorganization by the U.S. Bankruptcy Court and secured exit financing. At an Extraordinary Shareholders’ Meeting (ESM), Latam obtained the necessary shareholder approval of the company’s new capital structure and the issuance of the financing instruments presented in the Plan.
The airline also received the support of the vast majority of shareholders, corresponding to 99.8 percent of the shares present or represented at the meeting, which corresponds to 77.5 percent of the total voting shares, allowing LATAM to begin the final phase of the regulatory requirements in Chile for the eventual implementation of the Plan, as reported by the company.
Latam has restarted commercial flights to the most isolated airport in the world: from Arturo Merino Benítez International Airport in Santiago de Chile to Mataveri International Airport, the main town and port of Rapa Nui, with two weekly frequencies on Thursdays and Saturdays.
Latam is the only airline in South America that operates flights to this destination, which will be resumed with a Boeing 787-9 aircraft, with a capacity for 30 passengers in the premium business cabin and 274 passengers in the economy cabin. Mataveri International Airport is 2,336 miles (3,759 kilometers) from Santiago de Chile’s Arturo Merino Benitez International Airport.
Latam also took a recent step. Due to high operating costs due to inflation in Colombia and fuel prices, the Chilean airline, along with Avianca, Easyfly, and Viva, has suspended routes with low demand, which makes them unprofitable.
Latam will stop operating routes in Colombia between Cali and Montería and Cartagena – Pereira and Barranquilla and Cali, as of October 30, 2022. However, the airline will resume 14 routes in South America, thus recovering 80 percent of its operations.
Other Airlines in Trouble
Viva, the Colombian airline, canceled Cali-Cancun as of August 29, 2022. And as of September of this year, it will leave the Armenia-Cartagena, and the Armenia-San Andres route opened four months ago.
Avianca reduced its international flights by 14.5 percent and its domestic offer by 7.5 percent, as reported by Aviacionline. One of the last domestic routes to be suspended was the Bogotá – Corozal (Sucre) route. Other routes announced as temporary suspensions are: Bucaramanga – Cartagena, Barranquilla – Miami, and Cali – Miami, from September 1, 2022, resuming on December 8, 2022. Medellin – New York and Medellin – Miami from September 1, 2022, to October 30, 2022. Cartagena – Miami and Medellin – Orlando from September 1, 2022, resuming on December 8, 2022, and then will be operated seasonally.
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