LATAM Airlines Reports $441 Million Q3 Net Profit Despite Fuel Surge

Santiago-based LATAM Airlines Group posted a consolidated net profit of $441 million for the third quarter of 2026, marking a 16.3% increase compared to the $379 million recorded during the same period last year. Total operating revenues jumped 18.4% year-over-year to $4.567 billion, driven by sustained passenger travel appetite across South America and expanding cargo yields.

The solid bottom-line improvement arrived despite acute commodity cost pressures. The group carried 23.5 million passengers between July and September, up 2.7% over 2025, while maintaining an average network passenger load factor of 83.7%. Lower net interest expenses, down 29% to $183 million following previous liability management initiatives, helped reinforce net profitability against industry-wide operating headwinds.

Absorbing a 52% Surge in Jet Fuel Costs

Like major legacy network carriers worldwide, LATAM experienced significant financial headwinds from elevated global energy markets. Average all-in jet fuel prices, including the net effect of hedge contracts, climbed 52.1% year-over-year to $3.98 per gallon, equating to roughly $167 per barrel. Company accountants estimated the direct adverse impact of higher fuel expenses at approximately $520 million for the quarter.

The cost surge compressed operating profitability, with adjusted operating income standing at $573 million and adjusted operating margin settling at 12.5%, compared to 18.1% in the third quarter of 2025. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) reached $1.095 billion, down 4.7%. However, commercial execution and strong yield management enabled LATAM to offset roughly four-fifths of the cost increase, supported by a 9.4% rise in passenger unit revenues to 8.3 cents per available seat-kilometre (ASK).

Passenger Volumes and Cargo Division Performance

Consolidated flying capacity expanded 7.7% during the quarter to 47.9 billion available seat-kilometres. Passenger transport activities delivered $3.998 billion in revenue, representing a 17.8% gain over the prior year. High-yield premium cabin ticket sales performed with particular vigor, registering a 23% revenue increase as business travel and premium leisure itineraries rebounded across long-haul routes connecting North America and Europe.

The group's freight arm, LATAM Cargo, also generated healthy top-line expansion. Cargo revenue rose 19.5% to $483 million on the back of 256,000 metric tons transported across belly-hold space and dedicated Boeing 767-300 freighters. Meanwhile, the group's LATAM Pass loyalty programme grew its active roster to 57 million members, up 9% year-on-year, providing stable high-margin cash flows and enhanced customer retention.

Fleet Additions and Regional Route Deployment

LATAM closed the September quarter with a total fleet of 390 commercial aircraft. Over the three-month period, the carrier integrated three factory-fresh Airbus A320neos, three larger A321neos, and one widebody Boeing 787-9 Dreamliner into active scheduled service. The airline maintained total liquidity of $4.4 billion at the end of the period, preserving an adjusted net leverage ratio of 1.5 times.

Fleet modernization is shifting toward regional domestic connectivity in the fourth quarter. Subsidiary LATAM Airlines Brasil accepted delivery of its first two Embraer E195-E2 jets in October, with commercial line flying set to debut on November 30 across 42 domestic city pairs. Deploying the smaller, efficient Brazilian-manufactured twinjets will allow the group to introduce service to underserved regional hubs—including Cabo Frio, Macaé, and Rondonópolis—without diluting load factors.

Full-Year Guidance and Strategic Outlook

Reflecting the persistence of higher fuel prices into the final quarter of the year, LATAM adjusted its financial guidance for full-year 2026. Management raised the lower bound of expected total annual revenue to between $17.6 billion and $17.8 billion, up from the prior range of $17.3 billion to $17.7 billion.

Conversely, full-year adjusted EBITDA projections were revised to $3.90 billion to $4.05 billion, factoring in an assumed fourth-quarter jet fuel price of $180 per barrel. Consolidated annual capacity growth is now targeted between 8.5% and 9.5%, demonstrating cautious network discipline as South America's largest carrier balances robust customer demand with macroeconomic cost volatility.