LATAM Airlines 2Q26 Conference Call Highlights

Research evidence excerpt

J P M O R G A N

Latin America Equity Research

05 August 2026

LATAM Airlines

2Q26 Conference Call Highlights

Demand Environment & Fuel Recapture. Demand remains resilient across

the network, underpinning the fuel recapture strategy. This momentum is

further supported by a growing share of premium revenues, which already

account for 29% of total revenues. Visibility is gradually improving; however,

management reiterated its cautious stance. On the international front, demand

remains solid, although June proved particularly soft due to the World Cup.

South America–to–US routes are gradually recovering, and Europe continues

to perform strongly. Argentina, on the other hand, has been relatively subdued.

In domestic markets, Brazil and the northern part of South America are

performing well, while domestic Chile remains slightly weaker.

2027 Outlook. The company has not yet provided capacity guidance, but

highlighted the benefit of 12 Embraer E2 aircraft to be received later this year,

which are expected to fully contribute to 2027 performance. The company's

fleet plan implies a 3% year-over-year expansion in the total number of aircraft

at 2027 year-end; however, when considering the average fleet for the year,

2027 would imply an 8% year-over-year increase. LATAM should continue to

grow in line with demand, retaining the flexibility to phase out older A319s if

necessary. Visibility into the yield environment for next year remains limited;

however, management noted that prices typically hold for longer before easing,

particularly in the context of declining jet fuel prices.

CASK ex Fuel. The 2026 passenger CASK ex-fuel guidance is unchanged

versus last quarter at 4.5–4.7 cents. The increase versus the initial guidance

issued in December 2025 (4.3–4.5 cents) was primarily driven by FX, with

BRL being the most relevant FX component in the cost base. Inflation also

contributed to some upward pressure, although management expects

operational leverage to partially offset this impact. The company has been

actively working to keep unit costs stable over the years, with digitalization

initiatives serving as a key lever in this effort.

Embraer E2s.…