LATAM says capacity growth tracking to lower end of guidance as fuel stays high
LATAM Airlines expects 2023 capacity growth to be at the lower end of its 9-10% forecast due to high jet fuel prices, according to CEO Roberto Alvo. The airline has adjusted its flying plans but remains within its adjusted core earnings guidance of $4.1B-$4.4B. LATAM consumes 36-38M barrels of jet fuel annually, with a $10/barrel price change impacting costs by ~$370M. The company is focusing on premium traffic and may expand routes in Mexico with new Airbus A321XLR jets.
How this was made
The 30-second read
Why it matters
The updated guidance may lead to a sell‑off as investors reassess earnings outlook.
Market read
Guidance adjustment reflects cost pressures that could affect LATAM's stock and peers.
What to watch
Potential new A321XLR deliveries could improve capacity efficiency later in the year.
Background
LATAM Airlines previously guided 9‑10% capacity growth for 2026; fuel price spikes have prompted a revision.
Ticker impact
LATAM Airlines said its 2026 capacity growth will be at the lower end of its 9‑10% guidance due to high jet fuel prices.
likely pressure as the market prices in lower capacity growth and higher fuel costs
The CEO's fresh statement adjusts guidance downward after the August release, providing new material that could weigh on the stock.
Market effects
Airline sector may face broader pressure from elevated fuel costs.
Latin American travel market could see slower capacity expansion.
Higher jet fuel prices affect airlines worldwide, but impact is most immediate for LATAM.
Counterpoint
If premium revenue offsets fuel costs, the guidance cut may be temporary.
Key entities
- ExecutiveRoberto Alvo
Chief Executive Officer of LATAM Airlines
