Key Financial Results
- Q1 Total Revenue: $4.1 billion (21.7% YoY)
- Passenger Revenue: +24.4% YoY
- Cargo Revenue: +3.4% YoY
- Adjusted EBITDA: $1.3 billion
- Adjusted Operating Margin: 19.8% (3 points YoY) – HIGHEST quarterly margin in company history
- Net Income: $576 million (+62% YoY)
- Net Margin: ~14%
- Passenger CASK ex-fuel: $0.045 (increase vs Q1 2025 due to Brazilian real depreciation)
- Passenger RASK: +12.7% YoY

Operational Performance
- Capacity Growth: 10.4% YoY
- Passengers Transported: 22.9 million (9.1% YoY)
- Load Factor: 85.3% (+2 points YoY)

By Market:
- Brazil Domestic: Passenger RASK +17% (USD), +8% (local currency); demand growing above capacity
- Spanish-speaking Domestic Markets: Capacity stable; passenger RASK +25% (USD), +19% (local currency)
- International: Load factors ~87%; passenger RASK +6.3%

Fuel Impact & Q1 Mitigation
- Q1 Fuel Price: DOWN 3.3% YoY (due to hedging position and 20-30 day price lag mechanism)
- Estimated Q1 Fuel Impact: ~$40 million (timing meant limited Q1 effect)
- Note: Middle East conflict began late February/March; fuel consumption lag and partial hedges delayed full impact

Premium Revenue Growth – Key Differentiator
- Premium Revenue Growth: +28% YoY (14% faster than non-premium passenger revenues)
- Premium Share of Passenger Revenue: 27% (significant increase from pre-pandemic levels)
- Rationale: Premium travelers exhibit lower price elasticity and more stable demand – critical in volatile environment
- Skytrax Recognition: LATAM awarded 4-star rating – only airline in Latin American history to reach this level

Loyalty Program
- LATAM Pass Members: 55 million total (2.6 million Elite members)
- Largest airline loyalty program in region
- ~60% of passenger revenues generated by LATAM Pass members

Product Enhancements (Upcoming)
- Wi-Fi connectivity: Rolling out on wide-body fleet (first long-haul flight March 2026)
- Lounge expansion: São Paulo and Miami hubs
- Premium Comfort cabin: Launching 2027
- Airbus A321XLR: 13 aircraft arriving 2027+ with premium business cabin featuring full-flat seats, suite doors, direct aisle access, onboard connectivity
- Planned deployment: Lima, Brasília, Fortaleza for long-haul routes to US/Europe

Cash Flow & Balance Sheet
- Q1 Adjusted Operating Cash Flow: $858 million
- Net Cash Generation: $391 million (after CapEx, financial expenses, interim dividend payment of $90M)
- Quarter-end Liquidity: $4.1 billion
- Adjusted Net Leverage: 1.3x
- Unencumbered Assets: >$1.5 billion
- Debt Maturity Profile: No relevant short/mid-term maturities; all debt at market conditions (no Chapter 11 legacy)
- Credit Ratings: All major agencies at BB category with positive outlook (Moody’s upgraded outlook March 2026, Fitch reaffirmed April 2026)

Updated 2026 Guidance (Replacing Full-Year Guidance)

Fuel Price Assumptions (per barrel):
- Q2 2026: $170
- Q3 2026: $170
- Q4 2026: $150

Q2 2026 Specific Guidance:
- Additional Fuel Expenses: >$700 million (vs previous expectations)
- Expected Operating Margin: Mid to low single-digit (despite massive fuel hit)

Full Year 2026:
- Adjusted EBITDA: $3.8-4.2 billion (incorporates higher fuel impact)
- Passenger CASK ex-fuel: $0.045-0.047 (raised from previous guidance)
– Driver: Brazilian real appreciation (now assuming BRL 5.15 per USD vs previous BRL 5.50)
- Net Leverage: ≤1.8x (higher than previous but well below financial policy target)
- Liquidity: ≥$4.5 billion (lower than previous due to fuel, but still strong)

Guidance Philosophy: Company replaced full-year capacity/revenue guidance with focused metrics due to high uncertainty. Management prefers conservative assumptions to prepare for extended crisis.

Fuel Recovery & Capacity Response

Commercial Actions Implemented:
- Fare adjustments across most of network
- Targeted capacity reductions
- Management expects industry-wide capacity cuts to accelerate if high fuel persists
- ULCCs cutting capacity faster than airlines with better revenue quality

Demand Environment:
- Current status: Strong and stable across network
- Corporate segment: Strong in almost every country; International and Brazil domestic “stand out”
- Elastic segments: Slight slowdown, but LATAM less exposed (easier to compensate via diversified network origins)
- Forward bookings: Healthy for Q2 remainder and July winter holidays (important Southern Hemisphere peak period)
- No indication of macro-driven demand weakness in key segments

Fuel Pass-Through:
- Management declined to specify exact recovery percentage
- Stated mid-to-low single-digit Q2 margin guidance incorporates partial pass-through
- No assumption of government subsidies or non-market fuel pricing in any market

Strategic Advantages Emphasized

Relative & Structural Strengths:
1. Integrated passenger + cargo business (cargo provides diversification)
2. Large network presence across most operating markets (more sustainable than smaller networks in crisis)
3. Premium focus: 27% revenue from less price-elastic customers
4. Strong loyalty program: 60% revenues from members
5. Competitive cost structure
6. Strong balance sheet: Highest liquidity in company history
7. Experienced management: Proven track record navigating complex environments

Competitive Landscape:
- LATAM does NOT manage to market share targets
- Market share is “result of what we do, not a goal”
- Focus: Long-term network development, executing on strengths, profitable growth
- Observation: Airlines with weaker balance sheets and more elastic passenger exposure cutting capacity faster

Management Tone
Optimism: Built resilient model with unique regional advantages
Caution: Extremely uncertain environment with variables outside LATAM’s control
Approach: Disciplined, measured, conservative assumptions; prefer to prepare for worse scenario

Management emphasized LATAM’s “absolute and relative advantages clearly stand out in this particular scenario” with airlines having weaker balance sheets and elastic demand exposure being more vulnerable.