Latam Airlines, in its presentation of financial results for the second quarter of the year, detailed the increase in its operating expenses such as salaries, fuel, commissions to agents or aircraft leasing, among others, although it highlighted an increase in direct sales to the detriment of intermediaries.
Latam Airlines explained that its salaries and wages increased by 12.6% compared to 2023 in the same quarter, due to a “9.2% increase in the group’s average workforce (mainly pilots, cabin crew and airport employees),” adding that this is due to the 16.2% year-on-year increase in passenger operations, and mainly offset by exchange rate effects.
Fuel costs also increased 16.7% compared to the second quarter of 2023, due to a 14.8% increase in fuel consumption due to higher operations, and a 3.7% increase in the average price.
Commissions paid to agents also increased by 6.1% compared to 2Q23, due to the increase in total revenues, which was partially offset by a higher penetration of direct sales. Commission expenses, therefore, grew below the increase in the airline’s sales.
In addition, Latam Airlines mentioned that depreciation or amortization increased 20% compared to the same period in 2023, explained by the increase in the number of aircraft.
Latam Airlines reported that other rentals and landing fees increased 26.5% compared to 2Q23, due to a 24.6% increase in international operations, in addition to a higher number of passengers transported (+11.7%).
As reported by REPORTUR.coLatam’s operating costs increased by 14.6% in the quarter and although its sales for the quarter increased by 13.2% to USD 3,029.9 million due to the increase in the passenger business, its adjusted profit fell by 26.3% to USD 104.8 million compared to the same period of the previous year. (Latam lowers profit due to fuel price increase).
