Chile's LATAM Airlines swings to profit, beating estimates as passenger traffic grows

LATAM Airlines Monday posted a Q3 net profit of $232m, boosted by higher passenger revenue and a turnaround from a loss in the same period last year when the carrier was still in bankruptcy proceedings. The profit, which topped an analyst consensus, reverses a year-earlier net loss of $296m, with passenger revenue jumping 26%. Available seat kilometers (ASK), a measure of an airline's seats multiplied by kilometers flown, rose 15%, with recovery seen especially in international flights, LATAM said. The passenger boost plus lower jet fuel prices offset a 20% drop in cargo revenue to bring the carrier's adjusted operational margin to 13.4%. Q3 revenue, also beating consensus, rose 18% to a record $3.06b. The results were "better than expected," analysts at J.P. Morgan wrote in a client note, adding the news would likely be welcomed by the market. The airline late last year exited pandemic-related bankruptcy with an $8b reorganization plan. The airline's adjusted EBITDAR - earnings before interest, taxes, depreciation, amortization and restructuring or rent costs - increased in the quarter by 82% year-on-year to $726m. Last quarter, LATAM raised its forecasts for 2023. The airline now anticipates adjusted EBITDAR of $2.35b to $2.50b, versus the previous estimate of $2b to $2.2b. "We now think we're going to be in the upper end of that range," said CFO Ramiro Alfonsin in a call with journalists on Monday.<br/>