LATAM Airlines Group has plans to receive up to 72 aircraft between 2021 and 2028, according to the latest financial statements by the company. Approximately 97% of these incoming planes will be produced by Airbus, the remaining by Boeing.
LATAM’s new planes
The South American company is currently under a Chapter 11 bankruptcy protection in the United States. The airline is currently evaluating the adequate fleet needs for the following years.
LATAM has already rejected the leasing contracts of a few aircraft. Maybe the most unexpected was LATAM deciding to finish the leasing contract for its Airbus A350 fleet earlier this year.
The carrier has also negotiated with Airbus and Boeing regarding future deliveries. For instance, LATAM announced an agreement to purchase 28 Airbus A320 aircraft in August.
In its third-quarter financial results, LATAM said,
“Agreements regarding its fleet commitments have been reached with Boeing for two 787 Dreamliner aircraft and Airbus for a total of 70 A320neo family aircraft, which are 20% more fuel-efficient, reaffirming LATAM’s commitment to a modern fleet and its long-term sustainability strategy.”
The airline expects to receive these planes through 2028. Nevertheless, LATAM could modify the dates as a result of the ongoing discussions held with aircraft manufacturers.
What about LATAM current LATAM fleet?
In the last 17 months, LATAM has changed its fleet size accordingly to the current crisis. The airline has rejected many leasing contracts, such as the Airbus A350 subfleet. It has also announced some interesting movements, like turning its Boeing 767-300ER fleet into freighters to serve the growing cargo segment.
On December 31, 2019, LATAM’s fleet was 342 airplanes, including several subleased aircraft. Fast-forward, as of September 30, 2021, LATAM’s fleet is 302 aircraft.
The airline stated,
“The group’s fleet total 302 aircraft as of September 30, 2021, a result of 42 aircraft rejections since initiating Chapter 11 proceedings, 15 aircraft incorporations, and excluding the 11 B767s that were reclassified as available for sale.”
LATAM’s financial results in the quarter
Despite LATAM Airlines Group reporting continued revenue improvements, the South American carrier had a US$619.9 million net loss, due to the impact of the COVID-19 pandemic. LATAM continues to struggle to regain its pre-pandemic traffic figures but aims to close the year operating over 65% of 2019 capacity.
LATAM Airlines Group carried 11.5 million passengers in the quarter, still 40% below its pre-pandemic numbers. During the whole of 2021, LATAM has had 25.3 million passengers, 53.3% below 2019.
The airline had total revenues amounted US$1.3 billion, a 50.7% decrease compared to pre-pandemic levels. Passenger revenues in the quarter were 60.9% below the same period of 2019; meanwhile, cargo revenues increased by 43.6% compared to a couple of years ago, totaling US$361.4 million.
By the end of the quarter, LATAM had US$930.2 million in cash. The carrier also has access to US$1.55 billion of committed liquidity in the DIP financing of its Chapter 11 bankruptcy process.
Regarding Chapter 11, LATAM currently has its exclusivity period to file its Reorganization Plan extended through November 26, 2021.
What do you think of LATAM’s fleet plans? Let us know in the comments below.
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