Latam Airlines Posts $576M Q1 Profit but Cuts Outlook on Jet Fuel
Latam Airlines profit reached 576 million dollars in the first quarter of 2026, up 62 percent on the year, with an adjusted operating margin of 19.8 percent and 22.9 million passengers carried, the Chilean-based group announced on Tuesday, May 5, 2026, with capacity up 10.4 percent and a consolidated load factor of 85.3 percent.
Adjusted EBITDA came in at 1.3 billion dollars and free cash generation at 391 million dollars, while liquidity stood above 4.1 billion dollars, equivalent to 27 percent of trailing twelve-month revenue. The group then withdrew prior 2026 guidance, citing jet fuel near 170 dollars per barrel and the Strait of Hormuz disruption.
Key Points
— Latam reported Q1 2026 net profit of 576 million dollars, up 62 percent on the year, with a 19.8 percent operating margin.
— The carrier transported 22.9 million passengers, a 9.1 percent increase, with a consolidated load factor of 85.3 percent.
— Group EBITDA reached 1.3 billion dollars and liquidity 4.1 billion dollars, around 27 percent of trailing revenue.
— Latam expects more than 700 million dollars in extra fuel costs in Q2, assuming a 170 dollar jet fuel price.
— The group reset its 2026 guidance to an EBITDA range of 3.8 to 4.2 billion dollars and a low-to-mid single-digit margin in Q2.
What Latam Reported
The Rio Times, the Latin American financial news outlet, reports that Latam delivered the strongest opening quarter in its post-restructuring history, with revenue carried by international routes and the Brazilian domestic market. Cargo affiliates moved more than 250,000 tonnes during the quarter, with the seasonal export of cut flowers from Colombia and Ecuador to the United States as the standout flow. The 19.8 percent operating margin reflected a healthy unit revenue picture before the Brent crude move from 80 dollars per barrel to a 110-114 dollar range starting in late February.
Latam chief financial officer Ricardo Bottas said the carrier began 2026 maintaining the trend observed in 2025 and consolidating its financial performance, with growth in revenues, margins and cash. The Q1 free cash flow of 391 million dollars supports a debt profile that the group has gradually deleveraged after exiting Chapter 11 protection in November 2022.
The Fuel Reset
The carrier replaced its prior 2026 projections and updated assumptions for fuel and exchange rates. The new guidance calls for adjusted CASK ex-fuel between 4.50 and 4.70 cents of a dollar, an EBITDA range of 3.8 to 4.2 billion dollars and a low-to-mid single-digit operating margin in the second quarter. Latam expects more than 700 million dollars in extra fuel costs in Q2 alone, calculated against a 170 dollar per barrel jet fuel price.
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LATAM Airlines Group S.A., together with its subsidiaries, provides passenger and cargo air transportation services in Chile, Argentina, Peru, Colombia, Ecuador, Brazil, the United States, other Latin American countries, the Caribbean, Europe, and Oceania. As of December 31, 2024, the company provides passenger transport services to…
Net income rose to $1.5 bn in 2025, from $581.8 mn in 2023.
Chile — Live Market Board
-0.73%
176,589
-0.43%
69,198
+1.37%
10,747
-0.73%
2,924,356
+2.75%
2,118
-0.22%
19,767
+0.37%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IPSA | 10,747 | -0.73% | — | 10,826 | 10,826 | 10,697 | 1,018,573,232 |
| USD/CLP | 893.35 | -0.24% | -5.03% | 895.50 | 893.35 | 893.35 | — |
| COPPER | 6.42 | +1.29% | +36.39% | 6.34 | 6.43 | 6.41 | 287 |
| SQM-B | 72,594 | -1.25% | +133.42% | 73,510 | 73,498 | 71,749 | 316,159 |
| COPEC | 6,390 | -0.47% | -7.12% | 6,420 | 6,489 | 6,348 | 885,682 |
| BSANTANDER | 71.99 | +0.57% | +24.27% | 71.58 | 71.99 | 70.75 | 68,146,912 |
| FALABELLA | 5,864 | -1.09% | +20.74% | 5,929 | 5,929 | 5,660 | 11,231,512 |
| ENELAM | 79.00 | +0.64% | -15.02% | 78.50 | 79.00 | 76.33 | 43,827,598 |
| CENCOSUD | 2,122 | -3.55% | -34.87% | 2,200 | 2,244 | 2,122 | 1,550,011 |
| CMPC | 1,121 | -2.09% | -26.77% | 1,145 | 1,165 | 1,111 | 3,495,492 |
| BANCO CHILE | 172.99 | +0.48% | +19.51% | 172.16 | 173.99 | 170.60 | 61,046,661 |
| LATAM AIR | 23.39 | -1.52% | +29.44% | 23.75 | 23.60 | 23.00 | 680,116,411 |
| SOUTHERN COPPER | 189.88 | +5.68% | +111.26% | 179.67 | 190.00 | 184.01 | 1,065,229 |
Why It Matters for Latin American Aviation
Latam is the region’s largest carrier by capacity and the only one with a continental network covering Brazil, Chile, Colombia, Ecuador, Peru and major North American and European destinations. Its fuel reset signals that even the strongest operators are absorbing the Hormuz shock through margin compression. Brazilian airfares across Latam, Gol and Azul rose around 31 percent between March and April 2026, and 22 percent year-on-year, per a bank tracker.
The Hormuz disruption also drove Petrobras kerosene up 18 percent on May 1, with BNDES authorising emergency credit lines of up to 2.5 billion reais (around 495 million dollars) per carrier. Latam’s 4.1 billion dollar liquidity buffer compares favourably with regional peers and gives it more room to manage the cycle.
| Metric | Q1 2026 / outlook |
|---|---|
| Net profit | USD 576M (~BRL 2.9B) |
| Adjusted operating margin | 19.8% |
| Passengers transported | 22.9 million (+9.1%) |
| Capacity growth | +10.4% |
| Load factor | 85.3% |
| Adjusted EBITDA / Liquidity | USD 1.3B / USD 4.1B |
| 2026 EBITDA guidance (reset) | USD 3.8B to 4.2B |
| Q2 fuel cost surcharge | ~USD 700M+ |
How the Fuel Shock Reframes the Recovery
Latam exited Chapter 11 in late 2022 and rebuilt margins through a combination of capacity discipline, premium-cabin investments and a stronger codeshare with Delta Air Lines. The Q1 numbers extend that trajectory but the carrier now faces the same constraint visible across global aviation: a Brent oil price spike that turns a strong revenue picture into a compressed-margin one. The CFO commentary points to network diversification and cost discipline as the buffers.
The reset also has implications for the listing strategy. Latam relisted in New York in 2025 and trades on both the NYSE and the Santiago exchange, with index inclusion progress dependent on continued earnings momentum. Bottas indicated that the group’s flexible cost structure, advance of premium products and balance-sheet position give it room to absorb the volatility without changing the long-term capital allocation plan.
Connected Coverage
For broader context, see our coverage of the pause of Trump’s Project Freedom convoy in the Strait of Hormuz and our analysis of Brazil’s Central Bank signal that rate cuts will slow on the Brent oil shock.
What Happens Next
- Q2 2026 results: The fuel surcharge of more than 700 million dollars will hit reported Q2 numbers due in early August.
- Hormuz reopening: Project Freedom paused on May 5; resumption depends on the Iran negotiation track.
- BNDES credit lines: Up to 2.5 billion reais per Brazilian carrier are available to bridge the fuel-cost squeeze.
Frequently Asked Questions
How big was Latam Airlines profit in Q1 2026?
Latam Airlines profit was 576 million dollars in the first quarter of 2026, up 62 percent year on year, with an adjusted operating margin of 19.8 percent. The carrier transported 22.9 million passengers, a 9.1 percent increase, and lifted capacity by 10.4 percent with a consolidated load factor of 85.3 percent. Adjusted EBITDA came in at 1.3 billion dollars and free cash flow at 391 million dollars.
Why did Latam reset its 2026 guidance?
Latam reset its 2026 guidance because of the Strait of Hormuz disruption and Brent crude in the 110 to 114 dollar range, which lifted jet fuel to roughly 170 dollars per barrel. The new framework expects more than 700 million dollars in extra fuel costs in Q2, an EBITDA range of 3.8 to 4.2 billion dollars and a low-to-mid single-digit operating margin in the second quarter. Adjusted CASK ex-fuel was guided between 4.50 and 4.70 cents.
How strong is Latam’s balance sheet?
Latam ended the first quarter with liquidity above 4.1 billion dollars, equivalent to 27 percent of trailing twelve-month revenue, plus free cash generation of 391 million dollars during the quarter. The group exited Chapter 11 in November 2022 and has rebuilt margins through capacity discipline and premium-cabin investments. The cash buffer gives Latam room to absorb the 700 million dollar fuel hit without changing its long-term capital allocation plan.
How does the fuel shock affect ticket prices?
Brazilian airfares across Latam, Gol and Azul rose around 31 percent between March and April 2026 alone, and 22 percent year on year, according to bank-tracker data. Petrobras lifted aviation kerosene prices by 18 percent on May 1 in line with the Brent move from 80 to 114 dollars per barrel. Brazilian carriers can tap up to 2.5 billion reais each from BNDES emergency credit lines to bridge the fuel-cost squeeze.
Updated: 2026-05-06T09:00:00Z by Rio Times Editorial Desk