LATAM Airlines Group S.A. (SSE: LTM) has released its consolidated financial results for the second quarter of 2024. Overall, the airline group enjoyed strong growth and faced off external challenges.
The South American airline group turned in a strong performance across key metrics, signaling a robust recovery and strategic positioning in the global aviation market.
In a firm display of operational expansion, LATAM increased its passenger operations by 16.2% compared to the same period last year. This significant growth propelled the group’s operational revenues beyond the $3.0 billion mark, representing a substantial 13.2% year-over-year increase.
Operational Performance
Operational performance metrics showed the airline group appears to be firing on all cylinders. Available seat-kilometers (ASK), a key measure of capacity, grew by 16.2% compared to Q2 2023, surpassing 2019 levels by 8.3%.
This growth was accompanied by a strong load factor performance, with the consolidated load factor reaching 82.2%, an improvement of 1.8 percentage points year-over-year.
Notably, international operations achieved a robust load factor of 84.3%, while domestic operations in Brazil saw the most significant improvement, reaching 79.8%. The latter figure represents a 2.5 percentage point increase from the previous year.
Revenue Streams
The group’s revenue streams showed healthy growth across segments. Passenger revenues, the primary driver of the overall increase, rose by 14.3% compared to Q2 2023.
This growth was supported by increasing international demand and a sustained customer preference for the LATAM brand.
The cargo segment also performed well, with revenues increasing by 6.9% during the quarter and showing remarkable growth of 41.1% above pre-pandemic levels.
Challenges in Q2 2024
LATAM’s success story in Q2 2024 did not come without challenges. The closure of Salgado Filho International Airport in Porto Alegre due to flooding in the state of Rio Grande do Sul forced the cancellation of operations. This impacted an average of 24 daily frequencies for LATAM Airlines Brazil.
The group’s agility was evident in its response, as it managed to re-allocate 12% of the affected capacity to other markets by June, with plans to fully re-allocate by August.
Despite this setback, which resulted in an estimated $25 million negative impact on Q2 operating income, LATAM’s overall performance remained strong.
The first half of 2024 has been particularly successful for LATAM, with net income totaling $405 million – a significant 52.9% increase compared to the same period in 2023. This performance is a testament to the group’s strategic initiatives and operational efficiency.
LATAM’s CEO highlighted the group’s achievement of transporting over 79 million passengers in the last 12 months. The group’s growth has been particularly pronounced in the international market, with a substantial 24.6% increase in operations during the first half of the year compared to the previous year.
Looking Ahead
Looking ahead, LATAM is well-positioned for continued growth and modernization. With a diverse fleet of 340 aircraft, including 262 Airbus narrow-body, 57 Boeing wide-body, and 21 Boeing cargo freighters, the group is actively expanding and upgrading its fleet.
The addition of 5 Airbus A321neo aircraft in Q2 and ongoing agreements with Airbus and Boeing for future deliveries demonstrate LATAM’s commitment to enhancing its operational capabilities and efficiency.
LATAM Airlines Group’s Q2 2024 results reflect an airline that has successfully recovered from the challenges of recent years. It is now actively charting a course for sustained growth and market leadership in the South American aviation sector.
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