LATAM Airlines Group SA Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Michael Linenberg - Deutsche Bank AG - Analyst : Roberto, Andreas, Ricardo, Tori. And by the way, a warm welcome to Ricardo. Not only are you joining an airline that is a leader in Latin America, but I think many viewed as the gold standard on a global basis. So welcome aboard. I have two questions here. And maybe the first one to Andres and/or the team. You reiterated your December guidance. And yet, over the past two months, we've seen the currency depreciate pretty meaningfully against the dollar as well as fuel prices moved up. And so my question is, what are you seeing with respect to the pass-through of basically the higher cost of doing business that gives you confidence that you feel good about reiterating these numbers, the margins and revenue growth?

Question: Michael Linenberg - Deutsche Bank AG - Analyst : Great. And then just my second question on -- Go ahead.

Question: Michael Linenberg - Deutsche Bank AG - Analyst : Just my second question. Hearing your sort of potential opportunity with respect to capital deployment, shareholder returns, considering a share repurchase, are there any restrictions or mitigating factors that you mentioned $150 million on size. I realized that a good portion of your float is held by insiders. Is that one of the gating issues in sizing a potential share repurchase? If you could talk about that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 31, 2025 / 1:30PM, LTM.SN - Q4 2024 LATAM Airlines Group SA Earnings Call

Question: Jens Spiess - Morgan Stanley - Analyst : Congrats on the strong results to finish and wrap up the year. I just had a question on prices mainly. I mean looking at Brazilian market, in local currencies, your prices are down. So if you could just explain a bit more what's going on there? And if you see further pressure going forward? And also, on the international side, understand what's mainly driving the decrease in prices? Is it more interregional international flights? Or is it long haul? In terms of mix, how should we think about it?

Question: Jens Spiess - Morgan Stanley - Analyst : Okay. Understood. Yes. On that last point, that's what I'm trying to dissect. So because international, obviously, you're probably seeing some weakness on the interregional flights, which is volatility in the local currencies, but also it could end up being positive for long haul, right, in terms of pricing?

Question: Andre Ferreira - Banco Bradesco BBI S.A. - Analyst : Congrats on the results. Two topics here. So first, about the (inaudible) plan, it looks like it relies on a significant increase of the number of meters being delivered, and also significantly more than what was delivered in 2024. So my question is, if you see risk of this being hampered by further delays in deliveries by Airbus? And my second question, it looks like the combination of Azul and APRA or gold (inaudible). I just wanted to get your view on, I mean, how would this impact LATAM? How would this impact the local fare environment? And if it changes anything in LATAM's longer-term strategy for (inaudible) if it goes ahead?

Question: Stephen Trent - Citigroup Inc. - Analyst : First of all, I definitely appreciate the thoughts for the tragedy that happened in D.C. Along those lines, I would love to hear your guys' view on sort of the adequacy of infrastructure and traffic control capability in your key markets. Do you see sort of room for improvements there? Or you're pretty happy with how the infrastructure set up?

Question: Stephen Trent - Citigroup Inc. - Analyst : That's very helpful color. Really appreciate that. And as a very quick follow-up, when we think about the joint business agreement with Delta Airlines, where would you consider you are in terms of the extent to which that opportunity continues to spool up? Are we still kind of early stages? Are we sort of mid-cycle in terms of the revenue contribution you expect from that?

Question: Guilherme Mendes - JPMorgan Chase & Co - Analyst : And welcome, Ricardo. Good luck on the (inaudible). I have two questions. The first one is a follow-up on the capital allocation. Besides the dividends and the buybacks that we already discussed, Andres (inaudible), you also mentioned strategic investments as a potential use of capital. What exactly are you guys thinking about this one? And second one is, Robert, you mentioned about the strong demand across different regions. But in terms of competition, do you see any excessive capacity in other regions that could pressure prices in the near term?

Question: Pablo Monsivais - Barclays Bank - Analyst : Just a quick question on the demand per segment in terms of corporate and leisure. I remember that you have said, probably from the last 1.5 years, that leisure has been very, very strong, and corporate is also recuperating fastly. But what are you seeing right now? And what should we expect in terms of your capacity allocation going forward for leisure?

Question: Pablo Monsivais - Barclays Bank - Analyst : If I may ask a follow-up on that. And probably, I know it's too early to reach to this conclusion, but after (inaudible) merge, would you expect that share from the corporate partners in Brazil for you to be higher than what you already have? You see that perhaps direct impact of the competitive landscape?