Q3 2025 LATAM Airlines Group SA Earnings Call
Speaker #1: Ladies and gentlemen, thank you for joining us and welcome to the third quarter 2025 LATAM AIRLINES GROUP earnings conference call. After today's prepared remarks, we will host a question and answer session.
Operator: Ladies and gentlemen, thank you for joining us, and welcome to the Third Quarter 2025 LATAM Airlines Group Earnings Conference Call. After today's prepared remarks, we will host a question-and-answer session. Before I turn the call over to management, I'd like to remind you that certain statements in this presentation and during the Q&A may relate to future events and expectations and, as such, constitute forward-looking statements. Any matters discussed today that are not historical facts, particularly comments regarding the company's future plans, objectives, and expected performance or guidance, are forward-looking statements.
Speaker #1: If you would like to ask a question, please raise your hand. If you have dialed into today's call, please press *9 to raise your hand and *6 to unmute.
Speaker #1: Before I turn the call over to management, I'd like to remind you that certain statements in this presentation and during the Q&A may relate to future events and expectations and, as such, constitute forward-looking statements.
Speaker #1: Any matters discussed today that are not historical facts, particularly comments regarding the company's future plans, objectives, and expected performance or guidance, are forward-looking statements.
Speaker #1: These statements are based on a range of assumptions that LATAM believes are reasonable but are subject to uncertainties and risks that are discussed in detail in the published 20F, 2025 updated guidance, earnings release, financial statements, and related CMF and SEC filings.
Operator: These statements are based on a range of assumptions that LATAM believes are reasonable but are subject to uncertainties and risks that are discussed in detail in the published 20-F, 2025 updated guidance, earnings release, financial statements, and related CMF and SEC filings. The company's actual results may differ significantly from those projected or suggested and any forward-looking statements due to a variety of factors, which are discussed in detail in our SEC filings. If there are any members of the press on the call, please note that for the media, this is a listen-only call. I will now hand the conference over to Ricardo Bottas, Chief Financial Officer. Ricardo, please go ahead.
Speaker #1: The company's actual results may differ significantly from those projected or suggested in any forward-looking statements due to a variety of factors, which are discussed in detail in our SEC filings.
Speaker #1: And if there are any members of the press on the call, please note that for the media, this is a listen-only call. I will now hand the conference over to Ricardo Botas, Chief Financial Officer. Ricardo, please go ahead.
Speaker #1: Hello, everyone, and good morning.
Ricardo Bottas: Hello, everyone, and good morning. Welcome to our Q3 2025 conference call. Thank you all for joining us today. My name is Ricardo Bottas, and I am the CFO of LATAM Airlines Group. Here with me is Roberto Alvo, our CEO, Andrés del Valle, Corporate Finance Director, and Tori Craig, Head of Investor Relations. We will present our highlights and results for Q3. I will hand it over to Roberto to share his opening remarks. Once finished, I will present the key operational and financial figures as well as provide other updates.
Speaker #2: Welcome to our third quarter 2025 conference call, and thank you all for joining us today. My name is Ricardo Botas, and I am the CFO of LATAM Airlines Group.
Speaker #2: Here with me is Roberto Alvo, our CEO; Andrea del Valle, Corporate Finance Director; and Tori Crichton, Head of Investor Relations. We will present our highlights and results for the third quarter.
Speaker #2: I will hand it over to Roberto to share his opening remarks. Once finished, I will present the key operational and financial figures, as well as provide other updates.
Speaker #3: Good morning. Thank you, Ricardo, and thanks to all for being here today. This month, three years ago, LATAM emerged from financial restructuring. This period was one of learning, designing, and executing.
Roberto Alvo: Good morning. Thank you, Ricardo. Thanks to all for being here today. This month, 3 years ago, LATAM emerged from financial restructuring. This period was one of learning, designing, and executing. LATAM defined a blueprint that has a collection of essential elements we needed to excel. This blueprint was implemented and is working. The group's network is the most expansive in the region. Our loyalty program is by far the largest and most valued. No one else can connect South America within the region and to the world, reward loyalty, and provide choice to customers as LATAM Group can. However, these results are the product of more than a co-branded credit card and a map of routes. At LATAM, we are obsessed with execution.
Speaker #3: The blueprint has a collection of essential elements LATAM defined as necessary for us to excel. This blueprint was implemented and is working. The group's network is the most expansive in the region, and our loyalty program is by far the largest and most valued.
Speaker #3: No one else can connect to South America within the region and to the world. We work with loyalty and provide choice to customers as LATAM Group can.
Speaker #3: However, these results are the product of more than a co-branded credit card and a map of routes. At LATAM, we are obsessed with execution.
Speaker #3: Every day, in every interaction, we strive to be better. We aim to depart on time, stand at zero on every flight, improve on what we do, seek and find cost-saving opportunities for each of our activities, ensure we deliver what was promised to the customer at every interaction, and provide the care and respect that each one of them deserves.
Roberto Alvo: Every day, in every interaction, we strive to be better, to depart on time, standard zero on every flight, to improve on what we do, seek and find cost-saving opportunities for each of our activities, to make sure we deliver what was promised to the customer at every interaction, and to provide the care and respect that each one of them deserves as they entrust their journey to LATAM. We have made considerable progress but are not satisfied. I believe we can do better. Looking forward, we must ensure that we remain disciplined. Discipline in execution and discipline in controlling costs. At the center of all of this is our people, a group of more than 40,000 employees who care about and love what they do every day. People who believe in what they do and what it represents.
Speaker #3: As they entrust their journey to LATAM, we have made considerable progress, but we are not satisfied. I believe we can do better. Looking forward, we must ensure that we remain disciplined—disciplined in execution and disciplined in controlling costs.
Speaker #3: This is our people, a group at the center of all, comprising more than 40,000 employees who care about and love what they do every day.
Speaker #3: People who believe in what they do and what it represents are the engine and the spirit that drives LATAM Group forward. The most important commitment is to them, making sure that they feel that every day it is worth being part of the LATAM family.
Roberto Alvo: They are the engine and the spirit that drives LATAM Group forward. The most important commitment is to them, making sure that they feel that every day it is worth being part of the LATAM family. As we look into the future, I'm confident that we can continue the journey of improvement and deliver on purpose that we have, which is elevating every single journey. Thank you very much. Now back to Ricardo for a description of how we are achieving profitable growth, improving the quality of our traffic, keeping high customer satisfaction, and maintaining our costs under control.
Speaker #3: As we look into the future, I'm confident that we can continue the journey of improvement and deliver on the purpose that we have, which is elevating every single journey.
Speaker #3: Thank you very much. Now back to Ricardo for a description of how we are achieving profitable growth, improving the quality of our traffic, keeping high customer satisfaction, and maintaining our costs under control.
Speaker #2: Thank you, Roberto. Please join me on slide three. This quarter, LATAM Group continues to show the strength of its strategy, its unmatched network footprint, focus on disciplined operational and commercial execution, as well as product improvement.
Ricardo Bottas: Thank you, Roberto. Please join me on slide 3. This quarter, LATAM Group continues to show the strength of its strategy, its unmatched network footprint, focus on discipline operation and commercial execution, as well as product improvement. In terms of operations, LATAM Group transported over 22.9 million passengers, reinforcing its role as the leading airline group in South America. Capacity grew by 9.3% year-over-year, with healthy load factors of 85.4% on a consolidated basis. The group is seeing consistently high levels of customer satisfaction, increased customer preference, especially in the premium segment, and sustained customer loyalty. LATAM translated these operational performance into financial results, driven by an 8.4% increase in passenger unit revenues, while keeping unit costs broadly stable.
Speaker #2: In terms of operations, LATAM Group transported over 22.9 million passengers, reinforcing its role as the leading airline group in South America. Capacity grew by 9.3% year over year, with healthy load factors of 85.4% on a consolidated basis.
Speaker #2: The group is seeing consistently high levels of customer satisfaction, increased customer preference, especially in the premium segment, and sustained customer loyalty. LATAM translated these operational performances into financial results, driven by an 8.4% increase in passenger unit revenues, while keeping unit costs broadly stable.
Speaker #2: Adjusted operating margin expanded to 18.1%, while adjusted EBITDA reached $1.15 billion during the quarter, with net income totaling $379 million. During this quarter, LATAM executed its second share repurchase program for a total of $433 million, demonstrating the company's disciplined approach to capital allocation.
Ricardo Bottas: Adjusted operating margin expanded to 18.1%, while adjusted EBITDAR reached $1.15 billion during the quarter, and net income totaling $379 million. During this quarter, LATAM executed its second share repurchase program for a total of $433 million with company's disciplined approach to capital allocation. During this quarter, LATAM Airlines Group signed a major agreement for an acquisition of up to 74 Embraer E2 aircraft. Moving to the next slide about the fleet and the acquisition and transaction. The E2 will indeed enhance LATAM Group affiliates regional connectivity in South America and represents an opportunity for our network to open up to 35 new destinations. They also offer a 30% improvement in fuel efficiency per seat compared to previous generation aircraft, reinforcing the group's commitment to sustainability and cost discipline.
Speaker #2: During this quarter, LATAM Airlines Group signed a major agreement for the acquisition of up to 74 Embraer E2 aircraft. Moving to the next slide about the fleet and the acquisition and the transaction, the E2 will indeed enhance LATAM Group affiliates' regional connectivity in South America and represent an opportunity for our network to open up to 35 new destinations.
Speaker #2: They also offer a 30% improvement in full efficiency per seat compared to previous-generation aircraft, reinforcing the group's commitment to sustainability and cost discipline.
Speaker #2: In total, LATAM Group will receive 24 E2s, with 12 deliveries scheduled for the fourth quarter of 2026 and the remaining 12 in 2027. With this addition, LATAM's order book now exceeds 140 aircraft through 2030, supporting the group's long-term growth and fleet modernization strategy.
Ricardo Bottas: In total, LATAM Group will receive 24 E2s, with 12 deliveries scheduled for Q4 2026 and the remaining 12 in 2027. With this addition, LATAM's order book now exceeds 140 aircraft through 2030, supporting the group's long-term growth and fleet modernization strategy. Initial deliveries are set to begin with LATAM Airlines Brazil, which will be the first to deploy these aircraft in its network. In Brazil, these aircraft will enhance capillarity across the country, enabling LATAM Group to expand into under-penetrated regions and destinations that are currently not served by the group. Over time, and subject to market conditions and strategic evaluations, other LATAM affiliates may also incorporate the E2s into their operations.
Speaker #2: Initial deliveries are set to begin with LATAM Airlines Brazil, which will be the first to deploy these aircraft in its network. In Brazil, these aircraft will enhance capillarity across the country, enabling LATAM Group to expand into under-penetrated regions and destinations that are currently not served by the group.
Speaker #2: Over time, and subject to market conditions and strategic evaluations, order LATAM affiliates may also incorporate the E2s into their operations. Still on this slide, we expect to receive an additional eight aircraft in the four quarters of 2025. We also project to receive an additional 44 aircraft next year, including the E2s.
Ricardo Bottas: Still on this slide, we expect to receive an additional 8 aircraft on this Q4 of 2025, and also we project to receive additional 44 aircraft next year, including the E2s. Let's move to the following slide 5. As mentioned earlier, LATAM Group delivered another quarter of strong traffic performance, transporting almost 23 million passengers with a consolidated load factor of 85.4%. LATAM has been committed to profitable growth. At the consolidated level, passenger RASK increased by 8.4% year-over-year in USD, a result that reflects the strength of LATAM Group's strategy and execution. A clear example of this is Brazil, where LATAM Airlines Brazil grew capacity by over 12% year-over-year. With this expansion, customer preference remained strong, and the load factor even increased by 2.2 percentage points.
Speaker #2: Let's move to the following slide, slide five. As mentioned earlier, LATAM Group delivered another quarter of strong traffic performance, transporting over 20, almost 23 million passengers, with a consolidated load factor of 85.4%.
Speaker #2: LATAM has been committed to profitable growth at the consolidated level. Passenger revenue increased by 8.4% year over year in US dollars, a result that reflects the strength of LATAM's Group strategy and execution.
Speaker #2: A clear example of this is Brazil, where LATAM Airlines Brazil grew capacity by over 12% year over year. With this expansion, customer preference remained strong, and the load factor even increased by 2.2 percentage points.
Speaker #2: During the quarter, the Brazilian affiliate launched six new domestic routes, further supporting the strategy to deepen its presence and enhance connectivity in this market.
Ricardo Bottas: During the quarter, the Brazilian affiliate launched 6 new domestic routes, further supporting the strategy to deepen its presence and enhance connectivity in this market. In the Spanish-speaking countries, LATAM Group's affiliates have also improved performance during this quarter, with passenger RASK increasing 18% year-over-year. In particular, as compared to 2024, LATAM Airlines Colombia experienced a stable domestic industry capacity, also seeing healthy demand. Demand is in the other Spanish-speaking affiliates' domestic markets also remaining healthy, except for Chile, where industry traffic figures are stable against last year. However, the focus on delivery execution and a higher premium product offering helped fully offset these effects. Meanwhile, the international segment continued to operate with high load factors, reflecting the relevance of the network and LATAM Group's role as the main connector in the region with a diversified network.
Speaker #2: In the Spanish-speaking countries, LATAM Group's affiliates have also improved performance during this quarter, with passenger raft increasing 18% year over year. In particular, as compared to 2024, LATAM Airlines Colombia experienced a stable domestic industry capacity, also seeing healthy demand.
Speaker #2: Demand in the other Spanish-speaking affiliates' domestic markets remains healthy, except for Chile, where industry traffic figures are stable compared to last year. However, the focus on delivery execution and a higher premium product offering helped fully offset these effects.
Speaker #2: Meanwhile, the international segment continued to operate with high load factors, reflecting the relevance of the network and LATAM Group's role as the main connector in the region with a diversified network.
Speaker #2: Altogether, the unit revenues, even in the context of increased capacity, reflect the effectiveness of the group's commercial and customer strategy. Here is the result of offering the right product in the right markets while executing with discipline.
Ricardo Bottas: Altogether, the unit revenues, even in the context of increased capacity, reflect the effectiveness group's commercial and customer strategy. It is the result of offering the right product in the right markets while executing with discipline. Looking ahead, LATAM Group continues to focus on maintaining a sustained trajectory of discipline and profitable growth. The group is also focused on reaching the goal of high single-digit consolidated capacity growth next year compared to 2025, supported by our ongoing focus on efficiency, a relevant fleet delivery schedule, and a margin preservation on top of a healthy demand environment. Moving to the next slide 6. Regarding our value proposition and customer experience, LATAM Group remains committed to deliver a superior travel experience and increasing customer preference. During the quarter, the group continued advancing initiatives.
Speaker #2: Looking ahead, LATAM Group continues to focus on maintaining a sustained trajectory of discipline and profitable growth. The group is also focused on reaching the goal of high single-digit consolidated capacity growth next year, compared to 2025, supported by an ongoing focus on efficiency, a relevant fleet delivery schedule, and margin preservation on top of a healthy demand environment.
Speaker #2: Moving to the next slide, slide six, regarding our value proposition and customer experience, LATAM Group remains committed to delivering a superior travel experience and increasing customer preference.
Speaker #2: During the quarter, the group continued advancing initiatives. The new LIMA lounge was inaugurated at the recently opening Georgie Chavez International Airport, one of the group's main hubs.
Ricardo Bottas: The new Lima Lounge was inaugurated at the recently opened Jorge Chávez International Airport, one of the group's main hubs. This new space offers a modern and comfortable environment and comes in addition to the signature check-in area that was previously inaugurated at the same terminal, both part of a strategy to elevate the end-to-end experience for premium travelers and LATAM Pass members. Looking ahead, LATAM Group also announced the launch of its new Premium Comfort class, which will begin rolling out in 2027 on long-haul routes. This product reflects a commitment to offering more choices to our passengers for how they want to fly. The new class will be an additional option other than the existing economy and business class cabins for passengers seeking more space and personalized service.
Speaker #2: space offers a modern and comfortable This new environment and comes in addition to the signature check-in area that was previously inaugurated at the same terminal.
Speaker #2: Both part of a strategy to elevate the end-to-end experience for premium travelers and LATAM Pass members. Looking ahead, LATAM Group also announced that the launch of its new Premium Comfort Class will begin rolling out in 2027 along all routes.
Speaker #2: This product reflects a commitment to offering more choices to our passengers for how they want to fly. This new class will be an additional option, other than the existing Economy and Business Class cabins, for passengers seeking more space and personalized services.
Speaker #2: Finally, LATAM Group was once again recognized by APEX as a five-star global airline for 2026. This marks the fourth consecutive year the group has received this distinction, based on independent passenger feedback gathered from over 1 million flights worldwide.
Ricardo Bottas: LATAM Group was once again recognized by APEX as a five-star global airline for 2026. This marks the fourth consecutive year the group has received this distinction based on independent passenger feedback gathered from over 1 million flights worldwide. It's a testament to the team's dedication and to the impact of the investments being made across the network. In addition, LATAM Cargo Group was named Air Cargo Airline of the Year by Air Cargo News, becoming the only South American carrier to win in any category, further underscoring the group's excellence across all segments of the business. Together, these efforts underscore LATAM Group's dedication to continuous improvement and reinforce its strategic commitment to quality, consistency, and the passenger experience, a focus that continues to support more passengers choosing to fly with LATAM and the group's ability to capture premium revenues.
Speaker #2: It's a testament to the team's dedication and to the impact of the investment being made across the network. In addition, LATAM Cargo Group was named Air Cargo Airline of the Year by Air Cargo News, becoming the only South American carrier to win in any category, further underscoring the group's excellence across all segments of the business.
Speaker #2: Together, these efforts underscore LATAM Group's dedication to continuous improvement and reinforce its strategic commitment to quality, consistency, and the passenger experience—a focus that continues to support more passengers choosing to fly with LATAM and the group's ability to capture premium revenues.
Speaker #2: Next, let's move to slide seven. I will now walk you through the financial results for the third quarter, a period in which LATAM once again reflects solid execution.
Ricardo Bottas: Next, let's move to slide 7. I will now walk you through the financial results for Q3, a period in which LATAM once again reflects a solid execution. Total revenues reached $3.9 billion, an increase of 17.3% year-over-year, supported by growth across both passenger and cargo segments. Passenger revenues rose by 18.5%, with revenues from Premium travelers also showing relevant growth, increasing by more than 15% compared to the same period last year, while cargo revenues grew by 6.3%. On the cost side, total adjusted expenses ex-fuel increased by 21% year-over-year, driven mainly by increased operations, especially international, and also a lower base of comparison due to the one-offs impact in the same period of last year.
Speaker #2: Total revenues reached $3.9 billion, an increase of 17.3% year over year, supported by growth across both passenger and cargo segments. Passenger revenues rose by 18.5%, with revenues from premium travelers also showing relevant growth, increasing by more than 15% compared to the same period last year, while cargo revenues grew by 6.3%.
Speaker #2: On the cost side, total adjusted expenses increased by 21% year-over-year, driven mainly by increased operations, especially international, as well as a lower base of comparison due to the one-off impact in the same period of last year.
Speaker #2: This increase was partially offset by a 4.7% year-over-year decrease in jet fuel costs. That said, on the unit cost front, LATAM upheld its firm commitment to cost efficiency, a key pillar of its strategy.
Ricardo Bottas: This increase was partially offset by 4.7% year-over-year decrease in jet fuel costs. That said, on the unit cost front, LATAM upheld its firm commitment to cost efficiency, a key pillar of its strategy. LATAM delivered an adjusted operating margin of 18.1%, testament to LATAM's operational excellence through profitable growth, while also holding its cost control performance and advantage. Again, a non-negotiable and relevant part of LATAM's strategy. Lastly, net income for Q totaled $379 million, up 26% year-over-year, even after a -$105 million non-operational income statement impact related to the liability management exercise completed last July, as disclosed to the market before.
Speaker #2: As a result, LATAM delivered an adjusted operating margin of 18.1%, testament to LATAM's operational excellence through profitable growth, while also holding its cost control performance and advantage.
Speaker #2: Again, a non-negotiable and relevant part of LATAM's strategy. Lastly, net income for the quarter totaled $379 million, up 26% year over year.
Speaker #2: Even after a $105 million negative, non-operational income state impact related to the liability management exercise completed last July, as disclosed to the market before.
Speaker #2: Net income for the nine months was $976 million, 38% higher than the same period last year. Now, moving to slide eight, as you can see on this slide, LATAM's operational performance this quarter is a result of consistent and disciplined execution of the group's strategy over the past several years.
Ricardo Bottas: Net income for the 9 months was $976 million, 38% higher than the same period of last year. Now moving to the slide 8. As you can see on this slide, LATAM operational performance this quarter is a result of consistent and disciplined execution of the group's strategy over the past several years. Since 2019, LATAM has steadily expanded its adjusted operating margin, rising from 7.1% to 18.1% in Q3 2025. At the same time, LATAM has maintained tight control of its cost base. Adjusted passenger CASK ex-fuel has been stable between $0.042 and $0.043 on the last 12-month basis, despite inflationary pressures and higher activity.
Speaker #2: Since 2019, LATAM has established expanded its adjusted operating margin, rising from 7.1% to 18.1% in the third quarter of 2025. At the same time, LATAM has maintained tight control of its cost base, adjusted passenger caste export has been stable between 4.2 and 4.3 cents on the last 12 months basis, despite inflationary pressures and higher activity.
Speaker #2: This disciplined approach to cost has enabled LATAM to consistently grow margins, while preserving efficiency. In order to continue delivering sustainable and profitable growth going forward.
Ricardo Bottas: This disciplined approach to cost has enabled LATAM to consistently grow margins while preserving efficiency in order to continue delivering sustainable and profitable growth going forward. With regard to cash generation, as shown on slide nine, in Q3, LATAM delivered strong adjusted operating cash flow generation, reaching $859 million. Interest payments remaining contained at $52 million, mainly as a result of the debt refinancing executed in 2024, which enabled LATAM significant reduction of the cost of its non-fleet financial liabilities, which continue to translate into meaningful interest savings and overall cost of capital reduction. After both 2024 and 2025 refinance execution, combined interest payment savings expected for next year amount to $151 million compared to last year.
Speaker #2: With regard to cash generation as shown on slide nine, in the third quarter, LATAM delivered strong adjusted operating cash flow generation, reaching 815.9 million dollars, interest payments remaining contained at 52 million dollars, mainly as a result of the debt refinancing executed in 2024, which enables LATAM significant reduction of the cost of its non-split financial liabilities, which continue to translate into meaningful interest savings and overall cost of capital reduction.
Speaker #2: After both the 2024 and 2025 refinance executions, combined interest payment savings expected for next year amount to $151 million compared to last year. Finally, during the quarter, LATAM executed its second share repurchase program for a total of $433 million.
Ricardo Bottas: Finally, during Q3, LATAM executed its second share repurchase program for a total of $433 million. These reflect the group's capital allocation strategy and discipline. Let's move to slide 10 to discuss LATAM's capital structure. LATAM ended Q3 with a liquidity level of 25.8%, likely above the upper end of the financial policy range. The execution of the share repurchase program this Q3 roughly equated to more in line with the target levels. LATAM ended Q3 with an adjusted net leverage ratio of 1.5 times, aligned with the full-year guidance and well below the cap from the financial policy. A strong capital structure is not just a financial metric for LATAM; it's a strategic asset.
Speaker #2: These reflect the group's capital allocation strategy and discipline. Let's move to slide 10 to discuss LATAM's capital structure. LATAM ended the third quarter with a liquidity level of 25.8%. While this is likely above the upper end of the financial policy range, the execution of the share repurchase program this quarter brought liquidity more in line with the target levels.
Speaker #2: LATAM ended the quarter with an adjusted net leverage ratio of 1.5 times, aligned with the full-year guidance and well below the cap from the financial policy.
Speaker #2: A strong capital structure is not just a financial metric for LATAM; it’s a strategic asset. It gives the group the flexibility to pursue growth where it’s most profitable, return capital to shareholders when appropriate, and manage the most accretive capital structure.
Ricardo Bottas: It gives the group the flexibility to pursue growth where it's most profitable, return capital to shareholders when appropriate, and manage the most accretive capital structure. This financial strength, combined with assets and cost advantage, sets LATAM apart from its peers and remains central to its ability to compete, adapt, and lead into region over the long term. Please join me on slide 11. Given the solid year-to-date performance, supported by continued customer preference and the disciplined execution of a strategy centered on profitable growth, cost efficiency, and financial strength, LATAM has updated its full year 2025 guidance. Consolidated capacity is projected to remain broadly in line with previous estimates, while revenues are expected to be higher within a tighter range.
Speaker #2: This financial strength, combined with assets and cost advantage, sets LATAM apart from its peers and remains central to its ability to compete, adapt, and lead in the region over the long term.
Speaker #2: Please join me on slide 11. Given this solid year-to-date performance, supported by continued customer preference and the disciplined execution of a strategy centered on profitable growth, cost efficiency, and financial strength, LATAM is updating its full-year 2025 guidance.
Speaker #2: Consolidated capacity is projected to remain broadly in line with previous estimates, with wider revenues expected to be higher, within a tighter range. In terms of margins, adjusted EBITDA guidance has also been refined to be between $4 billion and $4.1 billion, close to 9% higher than the previous guidance.
Ricardo Bottas: In terms of margins, adjusted EBITDA guidance has also been refined to be between $4 billion and $4.1 billion, close to 9% higher than the previous guidance. The updated range reflects a more constructive outlook, now positioned higher than the previous estimate. Adjusted passenger CASK was updated to be between $0.0435 and $0.0440, mainly due to FX valuation in this period. Liquidity was also updated after the execution of the share repurchase program, and we are maintaining the same estimate to be above $4 billion by the end of this year. Mainly considering the adjusted EBITDA improvement and the cash generation, the forecasted leverage for year-end is now at 1.4x.
Speaker #2: The updated range reflects a more constructive outlook, now positioned higher than the previous estimate. Adjusted passenger cast export was updated to be between 4.35 cents and 4.40 cents, mainly due to FX valuation in this period.
Speaker #2: Liquidity was also updated after the execution of the share repurchase program, and we are maintaining the same estimate to be above $4 billion by the end of this year.
Speaker #2: Mainly considering the adjusted EBITDA improvement and cash generation, the forecasted leverage for year-end is now at 1.4 times. For next year, as I mentioned before, the group is focused on reaching the goal of high-signal digital capacity growth compared to 2025, supported by an ongoing dedication to efficiency and margin preservation.
Ricardo Bottas: For next year, as I mentioned before, the group is focused on reaching the goal of high single-digit capacity growth compared to 2025, supported by our ongoing dedication to efficiency and margin preservation. Finally, before we move to the Q&A, I'd like to take a moment to remind you that LATAM will be hosting an Investor Day in New York on 9 December 2025. We invite you also to tune into the live webcast on this event. We now open the line for your questions.
Speaker #2: Finally, and before we move to the Q&A, I'd like to take a moment to remind you that LATAM will be hosting an Investor Day in New York on December 9, 2025.
Speaker #2: We invite you to tune into the live webcast of this event. With that, we now open the line for your questions. We will now begin the question-and-answer session.
Operator: We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please raise your hand now. If you have dialed into today's call, please press star nine to raise your hand and star six to unmute. Please stand by while we compile the Q&A roster. Your first question comes from the line of Guilherme Mendes with J.P. Morgan. Your line is open. Please go ahead.
Speaker #2: Please limit yourself to one question and one follow-up. If you would like to ask a question, please raise your hand now. If you have dialed into today's call, please press *9 to raise your hand and *6 to unmute.
Speaker #2: Please stand by while we compile the Q&A roster. Your first question comes from the line of Guillaume Mendez with JP Morgan. Your line is open.
Speaker #2: Please go ahead.
Speaker #3: Hey, good morning, Roberto Ricardo. Great story. Thank you for taking my question, and congrats on another pretty strong result. My question is on the international front.
Guilherme Mendes: Good morning, Roberto, Ricardo, Andrés, Tori Creighton. Thanks for taking my question and congrats on other pretty strong results. My question is on the international front. When compared to Brazil domestic and Spanish-speaking countries, it looks like the depressed performance was relatively weaker, although still growing on a year-over-year basis. Can you share more details on how international is tracking, maybe on a per-region basis? Which of the routes have been pressuring your overall results and which are doing relatively better? Thank you.
Speaker #3: When compared to Brazil, domestic and Spanish-speaking countries, it looks like the press performance was relatively weaker. Although it's still growing on a year-by-year basis, can you share more details on how international is tracking, maybe on a per-region basis? Which other routes have been pressuring the overall results and which are doing relatively better?
Speaker #3: Thank you.
Speaker #4: Yes. Hi, Guillaume. Good morning and thanks. So, we have seen, in general, stable and healthy demand in most of the international segments. I would say that South America to the U.S. is a little bit softer than what we used to see in the last few months.
Roberto Alvo: Hi, Guilherme. Good morning, and thanks. We have seen in general stable and healthy demand in most of the international segments. I would say that South America to US is a little bit softer than what we used to see in the last few months. This is, in our view, linked to people probably avoiding going to the US and moving themselves a little bit into other regions. Also, the northern part of South America, the regional traffic, which is international flights on the northern part, is a little bit softer as well. In general, nothing that we have seen that is worrisome or concerning with respect to the level and the quality of the demand.
Speaker #4: And this is, in our view, linked to people probably avoiding going to the U.S. and moving themselves a little bit into other regions. Also, the northern part of South America, the regional traffic, which is international flights from the northern part, is a little bit softer as well.
Speaker #4: But in general, nothing that we have seen is worrisome or concerning with respect to the level and quality of the demand. So, in that sense, we remain confident in the prospects for the remainder of the year.
Roberto Alvo: In that sense, we remain confident on the prospects for the remainder of the year.
Speaker #4: year. Very clear, Robert.
Guilherme Mendes: Very clear, Roberto. Thank you. When you say softer into the US, this is more leisure related or even corporate related?
Speaker #3: Thank you. When you say softer into the U.S., is this more leisure-related or even corporate-related?
Speaker #4: No, this is more leisure-related.
Roberto Alvo: No, this is more leisure related.
Speaker #3: Okay. Very clear. Thank
Guilherme Mendes: Okay. Very clear. Thank you.
Speaker #3: you. Your next question
Operator: Your next question comes from the line of Mike Linenberg with Deutsche Bank. Your line is open. Please go ahead.
Speaker #2: comes from the line of Mike Lindenberg with Deutsche Bank. Your line is open. Please go.
Speaker #2: ahead.
Speaker #5: Oh, yeah.
Mike Linenberg: Oh, yeah. Hey, good morning, everyone. I have a couple here. I guess, Roberto, can you just update us on this measure in Brazil to potentially, you know, force airlines to offer up a free bag? Is that just domestic? Is that domestic and international? Where is that in the legislative process right now?
Speaker #5: Hey, good morning, everyone. I’m here. I guess, Roberto, can you just update us on this measure in Brazil to potentially force airlines to offer a free bag?
Speaker #5: Is that just domestic? Is that domestic and international? And where is that in the legislative process right now?
Speaker #4: Yes. Hi, Michael. How are you? Good morning.
Roberto Alvo: Yes. Hi, Mike. How are you? Good morning.
Mike Linenberg: Hey, good.
Speaker #5: Hey.
Roberto Alvo: Two weeks ago, the lower chamber in Brazil passed a law to allow basically passengers to carry a bag without being charged and also select seat without charge on seats that have no distinction in terms of space. This, as the law was passed, was for both domestic and international flights. It affects eventually therefore domestic and international carriers into Brazil. The law needs to go to the Senate. It has not been presented at the Senate floor at this point in time, and we have no clarity if that will happen and when it will happen. For the time being, that still has the second step. Ultimately, presidential veto is also something that the Brazilian constitution allows for laws like, so we will see.
Speaker #4: So, two weeks ago, a couple of weeks ago, the lower chamber in Brazil passed a law to allow passengers to carry a bag without being charged and also to select seats without charge on seats that have no distinction in terms of space.
Speaker #4: This, as the law was passed, was for both domestic and international flights. It eventually affects domestic and international carriers into Brazil. The law needs to go to the Senate; it has not been presented on the Senate floor at this point in time, and we have no clarity on if that will happen and when it will happen.
Speaker #4: So, for the time being, that still has that second step. Ultimately, the presidential veto is also something that the Brazilian Constitution allows for laws like this.
Speaker #4: see. You know,
Mike Linenberg: You know, the reason I ask is, and you mentioned international, is that, all right, domestic is one thing, but international, from the perspective, I know at least from the US, they may view it as a potential tax or additional cost that's unilateral and therefore in violation of the bilateral. I just wonder how they implement it internationally when international carriers have different ways in how they price their product and obviously are protected by the bilateral arrangements between Brazil and those countries.
Speaker #5: mentioned international, is that, all
Speaker #5: right, domestic is one thing, So we will the reason I ask is, and you but international, from the perspective I know at least from the US, they may view it as a potential tax.
Speaker #5: Or additional unilateral. And therefore, in violation of the bilateral cost. So I just wonder how they are implemented internationally when international carriers have different ways in how they price their product, and obviously are protected by the bilateral arrangements between Brazil and those countries.
Speaker #4: Yes, I completely agree with you, Michael. And of course, LATAM does not support the passing of the law. We, together with the IATA and ABEAR in Brazil, have been making it very clear and explaining the impact of this potential measure.
Roberto Alvo: Yes. I completely agree with you, Mike. Of course, LATAM does not support the passing of the law. We have, together with the IATA and ABEAR in Brazil, been making very clear and explaining the impact of this potential measure. This is not good, clearly, for the industry, airline industry in Brazil. I think I believe has the potential of ending up with higher fares for passengers that fly, whether into Brazil or outside or coming to Brazil. I think that at an industry level, we are making a lot of effort in making sure that everybody understands the impact that this has on traffic and on the industry. We're completely sure that this would not be a positive measure for us all.
Speaker #4: This is not good, clearly, for the airline industry in Brazil, and I believe it has the potential of ending up with higher fares for passengers that fly, whether into Brazil, outside, or coming to Brazil.
Speaker #4: So I think that, at an industry level, we are making a lot of effort to ensure that everybody understands the impact that this has on traffic and on the industry. We're completely sure that this would not be a positive measure for us all.
Speaker #5: Great. And then just my second on capital allocation. And this is Roberto, to you or Ricardo. How do you think about it longer term? You've had a nice balance.
Mike Linenberg: Great. Just my second on capital allocation, and this is Roberto to you or Ricardo, how you think about it longer term. You've had a nice balance. Obviously, you the dividend is, you know, statutory, but, you know, you pay the dividend, you've been paying down debt, you've also been buying back stock. As we think about, you know, the sort of the various levers going forward, should we expect to see, you know, say, regular reductions in shares outstanding or was that more of just an opportunistic initiative on your part? Thanks for taking my question.
Speaker #5: Obviously, the dividend is statutory, but you pay the dividend. You've been paying down debt; you've also been buying back stock. As we think about those various levers going forward, should we expect to see, say, regular reductions in shares outstanding?
Speaker #5: Or was that more of just an opportunistic initiative on your part? Thanks for taking my question.
Speaker #5: question. Thanks, Mike.
Roberto Alvo: Thanks, Mike. First of all, I mean, as we think about capitalization, do remember that the development of the business and how we see and foresee opportunities for growth is the priority. That will always take over other potential decisions. At this point in time, we believe we have done a balanced mix of initiatives, and we remain very close to the target that we have in terms of financial policy. We're content with what we have done during 2025. Going forward, looking forward, I think we will see. I mean, this is a board decision. Ultimately, the dividend payout in Chile, per law, is a shareholders meeting, the shareholder decision, which will happen in April. All options for capital allocation and growth investment remain open.
Speaker #4: So, first of all, as we think about capitalization, remember that the development of the business and how we see and foresee opportunities for growth is the priority.
Speaker #4: So that will always take over other potential decisions. At this point in time, we believe we have done a balanced mix of initiatives, and we remain very close to the target that we have in terms of financial policy.
Speaker #4: So, we are content with what we have done during Q3 2025. Going forward, I think we will see... I mean, this is a board decision.
Speaker #4: Ultimately, the dividend payout in Chile per law is a shareholders' meeting the shareholder decision, which will happen in April. But all options for capital allocation and growth investment remain open.
Speaker #4: And as we progress in the next few months, the company will for sure explain to the market how do we continue depending on our results.
Roberto Alvo: As we progress in the next few months, the company will for sure explain to the market how do we continue depending on our results and of course the situation in the region and the opportunities we may see.
Speaker #4: And of course, the situation in the region and the opportunities we
Speaker #4: may see. Great. Thank
Mike Linenberg: Great. Thank you.
Speaker #5: Thank you.
Speaker #4: you. Your
Roberto Alvo: Thank you.
Speaker #2: Your next question comes from the line of Gabriel Rezende with ITAL BBA. Your line is open. Please go ahead.
Operator: Your next question comes from the line of Gabriel Rezende with Itaú BBA. Your line is open. Please go ahead.
Speaker #3: Hi, Roberto, Ricardo. Thanks for opening up for questions, and congrats on these very strong results. I would like to follow up on your comments regarding the investments and the efforts you have been putting into bringing a more premium experience to the customers, and just trying to understand how relevant it has been so far in terms of your revenue growth as well as your profitability.
Gabriel Rezende: Hi, Roberto, Ricardo Bottas. Thanks for opening up for questions and congrats on these very strong results. I would like to follow up on your comments regarding the investments and the efforts you have been putting into bringing a more premium experience to the customers. Just trying to understand how relevant it has been so far in terms of your the revenue growth as well as your profitability. If you could maybe provide some color on how relevant these premium revenue are at this point. You mentioned that it has grown by 15% year on year. Just trying to understand on how much it represents out of total passenger revenue at this point, and how much could it represent in the future as you bring more efforts into this. Thank you.
Speaker #3: So if you could maybe provide some color on how relevant these premium revenue are at this point. You mentioned that it has grown by 15% year on year.
Speaker #3: So, I'm just trying to understand how much this represents out of total passenger revenue at this point, and how much it could represent in the future as we bring more efforts into this.
Speaker #3: Thank you.
Speaker #4: Yes, thanks for the message. The question is, first, I think it's important to remark on what we are experiencing. First, yes, premium revenue is growing faster than capacity.
Roberto Alvo: Yes. Thanks for the message, the question. First, I think it's important to remark what is it what we're experiencing. First, yes, premium revenue is growing faster than capacity, and a relevant portion of the improvement that we see in the RASK for Spanish-speaking domestic Brazil and to an extent international, is due to a change of mix, where we have a larger proportion and portion of premium revenue coming from there, and that's both corporate and as well. Let me call it high leisure. I don't know if that's the context or the concept in English, revenue that we're seeing. This is a function of, in my mind, two things. Most importantly is impeccable execution and care in every interaction that we made with the customer.
Speaker #4: And a relevant portion of the improvement that we see in the RASC for Spanish-speaking domestic Brazil, and to an extent international, is due to a change in mix where we have a larger proportion of premium revenue coming from there.
Speaker #4: And that's both corporate and, let me call it, high leisure. I don't know if that's the context or the concept in English.
Speaker #4: Revenue that we're seeing is, in my mind, a function of two things. Most importantly, it is impeccable execution and care in every interaction that we have with the customer.
Speaker #4: Secondly, it's improvements in products, as you probably saw in the presentation, the Lima Lounge premium economy in the international and other things. But as we have in a way decommoditized, if you want, our product, we have focused very much on experience and that I think has brought a willingness to pay that customers probably had that we were simply not exploiting because our product probably was not as good as they were expecting.
Roberto Alvo: It's improvements in products as you probably saw in the presentation, the LATAM Lounge Lima, Premium Economy, and international, and other things. As we have, in a way, decommoditized, if you want, our product, we have focused very much on experience. That, I think, has brought a willingness to pay that customers probably had that we were simply not exploiting because our product probably was not as good as they were expecting. Now we are, I think, very clearly seeing the impact that this has in our results.
Speaker #4: And now we are I think very clearly seeing the impact that this has in our results.
Speaker #3: Thank you. That's
Gabriel Rezende: Thank you. That's clear.
Speaker #3: clear. As a
Operator: As a reminder, if you would like to ask a question, please raise your hand now. If you have dialed into today's call, please press star nine to raise your hand and star six to unmute. Our next question comes from the line of Felipe Balavona with Santander. Your line is open. Please go ahead.
Speaker #2: Reminder: If you would like to ask a question, please raise your hand now. If you have dialed into today's call, please press *9 to raise your hand and *6 to unmute.
Speaker #2: Our next question comes from the line of Felipe Ballavona with Santander. Your line is open. Please go ahead.
Speaker #2: ahead. Hi,
Felipe Balavona: Hi, everyone. Can you hear me?
Speaker #6: everyone. Can you hear me?
Roberto Alvo: Yes, we can.
Speaker #6: Oh, Yes, we can. great. Awesome. So well, first of all, congrats and strong results. I have a couple of questions here. First, following actually on the first question of the Q&A, what was the reason behind the growth slowdown in international traffic recording in October?
Felipe Balavona: Great. Awesome. Well, first of all, congrats on the strong results. I have a couple of questions here. First is, following actually on the first question of the Q&A, what was the reason behind the growth slowdown in international traffic recorded in October? Is international traffic being dragged down by Colombia? The last couple of data points of the IATA have shown a slowdown in your international. Not only in the domestic has been the case for the previous months, but also in the international front. Also my second question is if you have any news regarding a potential buyback. Thank you, everyone.
Speaker #6: Is international traffic being dragged down by Colombia? The last couple of data points of the ITAL CB have shown a slowdown in international traffic. Not only has this been the case for the domestic sector in the previous months, but it has also affected the international front.
Speaker #6: And also, my second question is if you have any news regarding a potential buyback. Thank you, everyone.
Speaker #4: Yes. Hi, Felipe. First of all, our international Colombia operation is very small compared to the total international traffic. We have not seen, in particular, an impact on international traffic in and out of Colombia.
Roberto Alvo: Yes. Hi, Felipe. First of all, our international Colombia operation is very small as compared to the total international traffic. We have not seen in particular an impact on international traveling in and out of Colombia, and it's very unsubstantial to the size of our traffic, particularly out of Brazil, secondly Chile, and then Peru. No, I guess this is a function, as I explained in the beginning, softer demand into the US, particularly on leisure traffic. We believe that this is linked to people probably deciding to go elsewhere and probably spending more time within their countries and to the region. We don't see this as a fundamental slowdown in demand. It's probably assigned to more external factors than that. That's the main reason. Okay?
Speaker #4: And it's very unsubstantial to the size of our traffic, particularly out of Brazil, and secondly, Chile, and then Peru. No, I guess this is a function, as I explained in the beginning, of softer demand into the U.S., particularly on leisure traffic.
Speaker #4: We believe that this is linked to people probably deciding to go elsewhere and probably spending more time within their countries and the region.
Speaker #4: But we don't see this as a fundamental slowdown in demand. It's probably assigned to more external factors. So that's the main reason, okay? Having said that, do remember that you'd expect that our ASK growth for the whole of 2025 is going to be around 10 to 10.5% increase in capacity, which is a significant increase in capacity.
Roberto Alvo: Having said that, do remember that you'd expect that our ASK growth for the whole of 2025 is going to be around 10% to 10.5% increase in capacity, which is a significant increase in capacity, and that's a reflection of a good level of demand that we see to operate this then.
Speaker #4: And that's a reflection of a good level of demand that we see to operate at this level.
Felipe Balavona: That's very good color. Thank you, Roberto. Do you have any news regarding a potential buyback or-
Speaker #6: That's a very good color. Thank you Roberto. And do you have any news regarding a potential buyback or?
Roberto Alvo: Sorry.
Speaker #6: To early. No, you're sorry. fine.
Felipe Balavona: too early. No, you're fine.
Speaker #4: As I said before, at this point in time, we are close and to the financial policy targets that we have. Going forward, we will see what the board decides and do remember that the company has a range of alternatives to allocate capital and also be mindful that the first priority will always be growing the business.
Roberto Alvo: As I said before, at this point in time, we are close and to the financial policy targets that we have. Going forward, we will see what the board decides, and do remember that the company has a range of alternatives to allocate capital. Also be mindful that the first priority will always be growing the business. After that, any excess that we believe should go back to shareholders, the company has a few tools to decide on how to do. Rest, please stay tuned, if anything.
Speaker #4: And after that, any excess that we believe should go back to shareholders, the company has a few tools to define how to do it.
Speaker #4: So rest stay
Speaker #4: tuned. Understood.
Felipe Balavona: Understood. Thank you very much again, and congrats on the results.
Speaker #6: Thank you very much again. And congrats on the results.
Speaker #4: Thank you.
Roberto Alvo: Thank you.
Speaker #2: Your next question comes from the line of Jen Spies with Morgan Stanley. Your line is open. Please go ahead.
Operator: Your next question comes from the line of Jens Spies with Morgan Stanley. Your line is open. Please go ahead.
Speaker #3: Hello. Thank you for taking my questions. And congrats on the very strong results. Just wanted to know if you could provide any context on next year how is the order book the booking curve looking like and also how much do you expect to grow in terms of ASKs next year based on your fleet plan?
Jens Spies: Hello. Thank you for taking my questions. Congrats on the very strong results. Just wanted to know if you could provide any context on next year. How is the order book, the booking curve looking like? Also, how much do you expect to grow in terms of ASKs next year based on your fleet plan? That would be very helpful. If you could remind us how many leases do you have expiring next year, I would very much appreciate that. Thank you.
Speaker #3: That would be very helpful. And if you could remind us how many leases you have expiring next year, I would very much appreciate that.
Speaker #3: Thank
Speaker #3: you. Yes.
Roberto Alvo: Yes. Hi, Jens. As we explained in the press release, Ricardo mentioned here, we expect high single-digit ASK growth, or that's our goal for 2026. We will provide more detailed guidance on 2026 in a few more weeks. You asked about for the first part of the question, fleet. And by the way, yes, fleet. We have on slide 4 of the presentation, you can see 41 arrivals of A320 family and 7 E2 aircraft, plus 3 wide-bodies. We have relatively few leases. I don't have the correct figure here, the right figure, but we have the option to, of course, extend them if we want to.
Speaker #4: Hi, Jens. So as we explained in the press release and Ricardo mentioned here, we expect high single-digit ASK growth or that's our goal for 2026.
Speaker #4: We will provide more detailed guidance on 2026 in a few more weeks. You asked about for the first part of the question. Fleet and by the way, yes, fleet.
Speaker #4: So we have on slide four of the presentation, you can see 41 arrivals of A320 family and seven and A3 and E2 aircraft, plus three white here, the right figure, but we have the option to, few leases.
Speaker #4: bodies. We have relatively of course, extend them if we I don't have the correct figure want to. And our expectation at this point in time is to end of the year with a total fleet of just over 400 aircraft, around 410.
Roberto Alvo: Our expectation at this point in time is to end up the year with a total fleet of just over 400 aircraft, around 400. You can see that as well in the press release. Sorry, I'm just looking at a note here. They're sending me a Yes. Last thing, they just reminded me to make you feel comfortable that we have the fleet we need to grow for what we are expecting next year. I don't expect we need to make changes in our fleet plan for the capacity we have planned. The first part of the question you asked me now, remember, is booking curve into the beginning of the year. Very early still, particularly on domestic markets, the percentage of booked seats is very low.
Speaker #4: As well, you can see that press release. Okay, and sorry, I'm just looking at a note here they're sending me. Yes, and last thing, they just reminded me to make you feel comfortable that we have the fleet we need to grow.
Speaker #4: For what we're expecting next year, I don't expect that we would need to make changes in our fleet plan for the capacity we have planned.
Speaker #4: The first part of the question you asked me now, remember, is booking curve into the beginning of the year. Very early still, particularly on domestic markets, the percentage of book seats is very low.
Speaker #4: But what we're seeing initially for the first couple of months of the year looks in the current trend that we have seen on third quarter and that we expect for the rest of the year.
Roberto Alvo: What we're seeing initially for the first couple months of the year looks in the current trend that we have seen on Q3 and that we expect for the rest of the year.
Speaker #3: Perfect. Thank you.
Jens Spies: Perfect. Thank you.
Speaker #2: Your next question comes from the line of Ewald Stark with BICE. Your line is open. Please go ahead.
Operator: Your next question comes from the line of Ewald Stark with BICE. Your line is open. Please go ahead.
Speaker #5: Hi. Thanks for taking my question. I want to know if you can provide any color head fuel during this percentage of quarter. Especially as I would like to focus on if anything on booking going forward, that is driving this lower percentage of head fuel or maybe you're looking at something different about forecast of oils.
Ewald Stark: Hi. Thanks for taking my question. I wanna know if you can provide any color behind what is driving the lower percentage of hedged fuel during this quarter?
Roberto Alvo: Just go ahead.
Ewald Stark: Especially I would like to focus on if anything on booking going forward that is driving this lower percentage of hedged fuel, or maybe you're looking something different about forecast of oils. Thanks.
Speaker #5: Thanks.
Roberto Alvo: Okay.
Andrés del Valle: Heather, yeah, thanks for the question. If you look the press release, it's nothing that different of what we usually do. You have 47% for Q4 of this year, then 33% for Q1. Of course, as soon as we would approach the next quarters, we would, of course, consistent with the policy, an increase that the fuel hedge. I wouldn't say that this is any different from what you've seen in the past. It's a very standard, I think, a coverage that we have today for fuel price. Nothing that really deviates from the policy.
Speaker #4: Thanks for the question. If you look at the OK press release, it's nothing that different. Hi there. Yeah. Yeah. Yeah. from what we usually do.
Speaker #4: You have a 47% for Q4 of this year. And then 32% for Q1. And of course, as soon as we would approach the next quarters, we would have, of course, consistently policy and increase that the fuel heads.
Speaker #4: But I wouldn't say that this is any different from what you have seen in the past. It's a very standard I think a coverage that we have today for fuel price.
Speaker #4: Nothing that was really deviated from the
Speaker #4: policy. Financial statements say
Ewald Stark: Financial statements say that, it says, you have a 26% hedged fuel for the next 12 months. Starting from Q1 2026, every quarter is below 30%.
Speaker #5: You have a 26% head fuel for the next 12 months. Starting from the first quarter of 2026, every quarter is below.
Speaker #5: 30%. So, yeah. If you look at ...
Andrés del Valle: Yeah. If you look at the detail on the earnings release, it's more detailed here. I think the financials, that's a sort of a weighted average of, you know, what's going forward. Here you have the actual percentages covered for every quarter. Again, 47% for Q4, 33% for, you know, Q1. That's the difference. You were looking at the financials here. This is as of 14 November 23 5. It's more updated. I think, of course, the financials, they close for, I think, 30 September, but you have the most updated vision of the current portfolio as of 14 November.
Speaker #4: The detail on the earnings release is more comprehensive here. I think at the financials, that's just about the weighted average of what's going forward. But here, you have the actual percentages covered for every quarter.
Speaker #4: Again, 47% for Q4, 33% for Q1. So that's a difference. You were here. Then as this is as of November 14, 2025, it's more updated.
Speaker #4: I think, of course, the financials fall for, I think, September 30th, but this is you have the most updated vision of the current portfolio as of November 14th.
Ewald Stark: Okay. Perfect. Thanks.
Speaker #5: Okay. Perfect. Thanks.
Operator: As a final reminder, if you would like to ask a question, please raise your hand now. Your next question comes from the line of Guilherme Mendes with J.P. Morgan. Your line is open. Please go ahead.
Speaker #2: As a final reminder, if you would like to ask a question, please raise your hand now. If you have dialed into today's call, please press *9 to raise your hand and *6 to unmute.
Speaker #2: Your next question comes from the line of Guillermo Mendez with JP Morgan. Your line is open. Please go ahead.
Speaker #6: Yes, thanks for the follow-up. Regarding the pilot strike in Chile, can you share some potential expected impact for the fourth quarter? I understand it should be material, but I just wanted to hear your thoughts on what you expect from these negotiations.
Guilherme Mendes: Yes. Thanks for the follow-up. Regarding the pilot strike in Chile, can you share some potential expected impact for Q4? I understand it should be immaterial, but just wanted to hear your thoughts on what could we expect on this negotiation. Thank you.
Speaker #6: Thank
Speaker #6: you.
Speaker #4: Thanks,
Roberto Alvo: Thanks, Guilherme. At this point in time, We have no clarity of the potential impact, so we will update that if necessary at an appropriate time.
Speaker #4: Guillermo. At this point in time, we have no clarity of the potential impact. So we will update that if necessary at an appropriate time.
Speaker #6: Got it. Thanks,
Guilherme Mendes: Got it. Thanks, Roberto.
Speaker #6: Roberto. There are no further questions at this
Operator: There are no further questions at this time. I will now turn the call back to Ricardo Bottas for closing remarks.
Speaker #2: Time. I will now turn the call back to Ricardo Botas for closing remarks.
Roberto Alvo: I would like to thank you all to participate in this today's call, remind you that we will have our Investor Day again on 9 December. We'd love to have all of you participate on that opportunity to get more information from the company and on additional updates. Thank you all, have a good day.
Speaker #7: I would like to thank you all to participate in this today's call and remind you that we will have our investor day again on December 9th.
Speaker #7: So we'd love to have all of you participating in that opportunity to get more information from the company on additional updates. Thank you all, and have a good day.
Speaker #7: day.
Operator: This concludes today's call. Thank you for attending. You may now disconnect.
Speaker #2: This concludes today's