LATAM Airlines Group NYSE: LTM reported second-quarter 2026 results that remained profitable despite what management described as one of the airline industry’s sharpest recent increases in jet fuel prices.
Chief Executive Officer Roberto Alvo said the all-in impact of higher fuel prices exceeded $700 million during the quarter. Even so, the company posted an adjusted operating margin of 5.4%, at the higher end of management’s prior expectation for a mid- to low-single-digit margin in the period.
“The second quarter of 2026 was an important demonstration of the resilience of LATAM Airlines Group’s business model,” Alvo said, citing the company’s passenger, cargo and loyalty businesses, commercial initiatives, cost structure and balance sheet.
Revenue Growth Offsets Part of Fuel Shock
Chief Financial Officer Ricardo Bottas said LATAM’s average fuel price, including hedges, rose more than 80% year over year in the second quarter. Total fuel expense increased 93%, creating a substantial cost headwind.
LATAM responded with revenue-management actions and targeted capacity adjustments. Total revenue rose nearly 28% from a year earlier to almost $4.2 billion, led by a 28% increase in passenger revenue. Cargo revenue increased nearly 22%, supported by higher yields and growth in transported tons.
The company increased consolidated capacity 8.9% year over year while maintaining an 81.8% load factor, down from 83.5% in the prior-year period. Consolidated passenger revenue per available seat kilometer, or RASK, increased 17.5%.
Adjusted costs excluding fuel increased 14%, which Bottas said was broadly consistent with the expansion of the operation. Passenger cost per available seat kilometer excluding fuel remained sequentially stable at $0.045.
LATAM generated net income of $125 million and adjusted operating cash flow of $476 million. The company said it produced a positive cash change of nearly $150 million before dividend payments and ended the quarter with a positive net cash variation of $110 million.
Premium, Loyalty and Regional Demand
Management said premium traffic and the LATAM Pass loyalty ecosystem helped preserve revenue quality during the period of higher fares. Premium revenue represented 29% of passenger revenue and grew faster than main-cabin revenue, according to the company.
Source: MarketBeat
