LATAM Airlines trims earnings outlook as fuel costs bite

LATAM Airlines has revised its earnings forecast lower for the year due to rising fuel costs impacting margins, despite higher projected revenues from robust travel demand. The Latin America's biggest airline group reported a strong third-quarter with $4.57 billion in revenue, close to analysts' estimates. Adjusted EBITDA of $1.10 billion exceeded the $1.05 billion consensus.

Net profit increased by 16% to $441 million. However, soaring fuel prices, which rose over 50% year-on-year, cost the company around $520 million, reducing adjusted operating margin significantly. LATAM has lowered its adjusted EBITDA forecast to $3.9 billion to $4.05 billion, down from $4.1 billion to $4.4 billion, while extending its 2026 revenue outlook to between $17.6 billion and $17.8 billion, up from $17.3 billion to $17.7 billion.

The CEO acknowledged the company has already begun cutting some planned flights and is on track with the lower end of its capacity-growth target as fuel prices remain high.