LATAM RAMPS UP ITS OPERATION, ENDS 2020 WITH US$3 BN OF LIQUIDITY AND ADVANCES IN CHAPTER 11 PROCEEDINGS
LATAM Airlines Group closed the 2020 fiscal year with $3 billion of available liquidity ($1.7 billion in available cash along with $1.3 billion in a committed DIP financing line), in a year marked by travel restrictions and a sharp contraction in passenger demand due to COVID-19. To face the pandemic, the group implemented an important cost reduction policy, reducing costs by 38.1% during the year compared to 2019.
During the last quarter of the year, total revenue was $897.5 million, representing a reduction of 68.7% compared to the same period of the previous year. This decline was partially offset by a 26.7% increase in cargo revenue, in response to the strong demand for these services during the pandemic. On the other hand, operating costs decreased 44.5% in the fourth quarter of the year, explained by lower passenger operations and the group's efforts to reduce its fixed costs. The group ended the quarter with losses of $962.5 million in relation to the same quarter of 2019.
"2020 was the most challenging year in history for the aviation industry and for LATAM. Although the COVID-19 crisis had profound effects on the group and its operations, and will continue to do so for a while, this context has allowed us to make decisions for change. We will emerge as a closer, simpler, more agile and more efficient company. We have no doubt that when the crisis passes, LATAM will operate as a strengthened group", said Roberto Alvo, CEO of LATAM Airlines Group
2020 was also marked by several relevant milestones. LATAM Airlines Group and its subsidiaries in Chile, Peru, Colombia, Ecuador, the United States, and Brazil filed forf voluntary reorganization processes under the U.S. Chapter 11 financial reorganization statute. Currently, LATAM is working on its reorganization plan, within the framework of said process.
Towards the end of the year, LATAM launched its e-business unit, a new, simpler, and more user-friendly digital experience for its customers in Ecuador, Colombia, Chile, and recently, in Brazil, allowing passengers to have control of their itinerary at all times.
Last year, LATAM also achieved its highest satisfaction rates from its customers, as measured by the Net Promoter Score (NPS). It is the highest score LATAM has received since the measurement’s implementation in 2008. Passengers valued the on-board service during the trips, the extra security and sanitation measures adopted since the start of the pandemic, and the excellent punctuality of LATAM flights.
Through the Avión Solidario program, the group managed to keep South America connected to the world during the pandemic. More than a thousand tons of medical supplies were transported, benefiting Argentina, Brazil, Chile, Colombia, Ecuador, and Peru. More than 1.100 organs and tissues were mobilized within South America and the transfer of stem cells was carried out for eight people with blood cancer, who were able to receive a second chance at life, in addition to the transport of more than 900 health professionals.. At the end of the year, LATAM also began the transport of thousands of vaccine doses to South America, as well as the free distribution of more than 13 million doses in the national markets of Brazil, Chile, Ecuador and Peru.