LATAM works to withstand tough conditions through capacity cuts and balance sheet fortification

LATAM Airlines Group is working to maintain adequate liquidity levels during 2016 to withstand the still challenging economic situation in much of Latin America. Although its ratios ticked up at YE2015, those metrics have actually remained relatively stable during the last couple of years.

Brazil's recession remains a drag on the region, and as a result LATAM has decided to expand its planned capacity decreases, both in the country's domestic market and also on routes between Brazil and North America. Although currency devaluation remains a drag in LATAM's Spanish-speaking markets, demand in those countries continues to be relatively healthy, with Argentina in particular showing signs of strength.

LATAM has also reduced its fleet commitments for the 2016 to 2018 time period and has financing for the USD2 billion in aircraft that it plans to spend for 2016. The company is taking necessary steps to weather some of the toughest conditions it has experienced in decades - against a backdrop of a slow and uncertain recovery.