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Airline highlighted the Brazilian market as “driver” of the quarter. However, that was not enough to stop an 81% drop in their income.
How “A closed chapter” described Latam Airlines, during its third quarter results release, the DIP financing process, with which the group managed to access the US $ 2.45 billion that will allow it to face its restructuring amid the impact of the coronavirus.
“In Chapter 11 we have reached a milestone. DIP financing is a before and after for the company. In addition to the US $ 866 million we have in cash at the end of September, We already have the possibility to go out and obtain these US $ 2.45 billion, which gives us the ability to face the crisis, “said Ramiro Alfonsín CFO of Latam in the delivery of the balance sheet.
ANow, the firm’s focus will be on preparing the claim (is of creditors and the renegotiation of the fleet. “We are working on the company reorganization plan to present when appropriate,” Alfonsín added.
Expected losses
Despite the progress, the airline still cannot get out of the negative figures. Between July and September, it recorded losses of US $ 573.1 million. Regarding its operating loss, it was US $ 564.7 million. Of course, the figure reflects an improvement compared to the previous three months, considering that then it lost US $ 890 million.
Revenues, meanwhile, suffered a drop of 81% compared to the same period last year, to US $ 512.9 million.
Alfonsín highlighted the 13% increase in cargo in the period and also valued the effort to reduce costs, which fell 55% to US $ 1,077 million, but that was not enough to offset the collapse in demand.
“Although we have made a lot of effort in costs, they are not good results. It is no surprise given this environment of demand and will be operating in September at 20% “capacity, the CFO said.” It is very difficult to have positive results. The financial situation of the company is very solid, but the results are effectively seeing the impact of demand. “
Take flight
With the financial negotiation resolved, the airline is now focusing on getting back on track. During the third trimester Latam operated at 14.2% of its capacity, going from 9% to 14% in August, ending in September at 20%.
“We are already beginning to see bouts of recovery. At the end of the year we are forecasting to operate at 40%, measured in ASK, of what we operated last year “Alfonsín pointed out.
The market for Brazil He was the one that got the most applause in the delivery of results. Latam’s operation in this country was the “driver” of the quarter. In September, the load factor exceeded 80% for the first time since the pandemic began.
Finally, regarding possible new terminations, Alfonsín pointed out that it is difficult to rule out what may happen, “But we will be selective with what is growth and the operation so as not to find ourselves at another time where we have to make disassociations.
New announcements
Alfonsín took the opportunity to make three new announcements. The first was the launch of a check in remote in three cities in Brazil that will allow operators in other places to serve passengers to dispatch their luggage. “Then, an employee in Antofagasta will be able to serve a person in Vitória, Rio de Janeiro, Florianópolis or Sao Paulo,” he clarified.
The second is a code share agreement between Latam Brasil and Latam Colombia with Aeroméxico –Also undergoing a restructuring process-, with which they plan to increase the offer and connectivity of both networks, and benefits for the regular passengers of all airlines. “They will be able to accumulate and redeem miles in their respective frequent flyer programs,” he said.
The latest is the launch of a new business unit called E-Business, which will depend on the commercial vice-presidency and which will allow a whole new digital experience to be offered. Among its benefits will be the possibility of making a car check in, receive personalized notifications by WhatsApp, text message or email; have on hand a digital wallet that will reduce the need for contact with the traditional form of payment, among others. This division is already operational in Ecuador and Chile, the company said.
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