We expect passenger and demand operations to continue to rise progressively, but we cannot lose sight of external risks.”
Roberto Alvo, CEO of Latam Airlines
Starting in March, Latam Airlines began to leave behind the effects of the pandemic on its operations, explained the airline’s CEO, Roberto Alvo, in the framework of its annual shareholders’ meeting. However, he acknowledged that the company continues to see a complex recovery scenario in 2022, due to the volatility of various economic and political factors worldwide.
In fact, the senior executive pointed out that Latam sees the reactivation for this year with “cautious optimism”. “We expect passenger and demand operations to continue to rise progressively, but we cannot lose sight of external risks. The conflict in Ukraine and its potential impact on the world economy, and in particular on the price of oil, added to the high levels of inflation and the political uncertainty in the region, are effects that we are watching carefully,” Alvo explained.
Even so, the CEO of Latam said that the airline is in a good economic position to address these fronts considering that it closed 2021 operating at 70% of its passenger capacity and that in the last quarter of that year it obtained its first positive operating result. , after the health outbreak.
“This shows the effort that we have all made in Latam and positions us in a good way for a post-pandemic period,” he said. Along the same lines, the executive highlighted the announcement of his plan to integrate 10 cargo aircraft by 2023, in order to focus on the line of business least affected by the global context.
The Latam group anticipates that it will return to having an operation similar to pre-pandemic levels at the beginning of 2024 and that it will exceed said results in 2025. By then, revenue growth would be 7% higher compared to 2019 and, in 2026 -according to estimates- it would be 13% more, driven mainly by its plan for greater cargo transportation.
One of the last milestones of Latam before sealing its exit in Chapter 11 -scheduled for the second half of this 2022- will be to call a new shareholders’ meeting, in order to approve a capital increase that will mean the dilution of the current company papers.
This imminent step is viewed with concern by minority shareholders, who every year accuse the board of directors and the executive staff of “abuse by the majority”, who have had a greater role during the process with capital injection. However, at the 2022 meeting, these owners added a new ingredient to their annoyance: the “strange” departure of Costa Verde – the financial vehicle of the Cueto family – from the Commission for the Financial Market (CMF).