By Brazil Stock Guide – Latam Airlines Group SA (NYSE: LTM) reported a first-quarter net profit of $576 million, supported by double-digit capacity growth, stronger passenger demand and what the company described as the resilience of its business model.
The Santiago-based carrier said adjusted operating margin reached 19.8% in the quarter, while adjusted Ebitda totaled $1.3 billion, even after an estimated $40 million impact from higher fuel prices.
The airline group increased capacity by 10.4% from a year earlier and carried 22.9 million passengers, up 9.1% from the same period in 2025. Growth was driven by international operations and Latam Airlines Brasil’s domestic market, with the consolidated load factor reaching 85.3%.
Cargo affiliates transported more than 250,000 tons during the quarter, helped by the flower export season from Colombia and Ecuador to the US.
Latam generated $391 million in cash during the period and kept total liquidity above $4.1 billion, equivalent to 27% of revenue over the previous 12 months.
“Latam began 2026 maintaining the trend observed in 2025 and consolidating its financial performance, with sustained growth in revenue, margins and cash generation,” Chief Financial Officer Ricardo Bottas said.
“This strength, supported by a diversified network, the advance of the premium segment and an efficient cost structure, provides the flexibility needed to manage fuel volatility and uncertainty for the rest of the year,” Bottas said.
The company replaced its previous 2026 guidance because of market volatility and current uncertainty. Latam now expects passenger adjusted CASK, excluding fuel, between 4.50 cents and 4.70 cents, and adjusted Ebitda between $3.8 billion and $4.2 billion.
Latam also projects adjusted net leverage at or below 1.8 times and liquidity of at least $4.5 billion.
The new outlook assumes fuel costs of $170 a barrel in the second and third quarters and $150 a barrel in the fourth quarter. The company also revised its assumption for Brazil’s exchange rate to 5.15 reais per dollar from 5.5 reais per dollar.
Latam said the appreciation of local currencies, including the Brazilian real, is contributing to higher adjusted passenger CASK excluding fuel.
For the second quarter, the group expects additional fuel expenses of more than $700 million, assuming jet fuel at $170 a barrel. The company said the effect on margins and cash flow should be partly offset by revenue-management measures, targeted capacity adjustments, cost-control initiatives, liquidity actions, working-capital measures and its hedging policy.
Despite the fuel-cost pressure, Latam expects adjusted operating margin in the low-to-mid single digits in the second quarter.
The company also highlighted operational and strategic developments. Latam said it became the first Latin American airline to earn a four-star rating in the Skytrax World Airline Star Rating.
The group also said its future Airbus SE (EPA: AIR) A321XLR fleet will include a revamped Premium Business cabin, with fully lie-flat seats and individual doors for greater privacy.
Latam said S&P Global Inc. (NYSE: SPGI) reaffirmed the group as the world’s fifth-most sustainable airline and the top-ranked carrier in the Western Hemisphere for the second consecutive year.
In April, Latam Airlines Brasil and Delta Air Lines Inc. (NYSE: DAL) announced a long-term commercial agreement for maintenance, repair and overhaul services in São Carlos, São Paulo state, focused on A320-family components.