LATAM Airlines Group is expected to save USD100 million more than initially expected, reduce its debt by 36%, and hopes to exceed 2019 revenue levels by reaching USD11.5 billion in 2024.
This is according to adjustments made to its five-year 2021-2027 business plan in line with new global macroeconomic conditions, the airline group announced in a statement.
“Our updated business plan reflects how LATAM group is better prepared to face future challenges, with a more competitive and flexible cost structure, a more complete offering for customers, and important progress towards more sustainable aviation,” commented Group Chief Executive Officer Roberto Alvo.
As reported, on June 18, 2022, the US Bankruptcy Court in New York confirmed the group’s plan of reorganisation and financing to exit Chapter 11, expected in the last quarter of 2022.
The new version of the plan updated LATAM’s cost savings estimate from USD900 million to more than USD1 billion annually, resulting from initiatives that have already been implemented. These include improvements in its cost structure and structural reform in fleet renegotiation, network strengthening, and a reduction of its total debt by 36% compared to pre-pandemic levels.
Regarding revenue, the group is expected to exceed 2019 levels by 2024, reaching USD11.5 billion.
It expects a recovery in the domestic markets of its subsidiaries to 2019 levels by the end of 2022. In the case of Colombia, such recovery was achieved in the first quarter of 2022 already, while Brazil and Ecuador are expected to achieve it within the third quarter of 2022.
Recovery of international traffic – which accounted for about 45% of 2019 revenues – is expected to be slower, reaching 2019 levels by mid-2023.
For 2024, the group projects passenger operations measured in available seat kilometres (ASK) similar to 2019.