LTM

• Overall Business Resilience

  • LATAM delivered profitable results despite an unprecedented jet fuel price headwind, with Q2 fuel costs up 93% year-over-year and a total incremental fuel cost impact exceeding $700 million in the quarter.
  • The diversified business model (passenger, cargo, LATAM Pass loyalty) and dedicated workforce of over 43,000 enabled the group to offset a large portion of fuel cost increases while preserving healthy demand.
  • Customer preference remained strong, with premium segment demand structurally more resilient than economy, supporting higher quality revenue mix, and LATAM Pass deepening customer loyalty and engagement.

• Network and Fleet Strategy

  • The Embraer E2 aircraft deployment in Brazil is on track: the first 12 aircraft will be delivered between October and December 2026, with commercial operations launching November 3, 2026.
  • Initial deployment covers 42 domestic routes in Brazil, including 8 new routes that expand the network to previously unserved markets, growing LATAM Brazil's total domestic destinations to 67 (up from 44 in 2019), the largest in company history.
  • The E2 fleet improves network connectivity by feeding regional traffic into LATAM's international long-haul network, increases network capillarity, and features consistent economy/premium economy product standards.
  • Management is evaluating up to 18 potential new bases for the next phase of E2 expansion starting in early 2027 as additional aircraft are delivered.

• Financial Position

  • Consistent cash generation supports balance sheet strength, long-term investment, and capital return. LATAM ended Q2 with liquidity of over $4.2 billion and adjusted net leverage of 1.5x, well below the 2x target in the company's financial policy.
  • Shareholders approved a new 5-year share repurchase program allowing repurchase of up to 5% of total outstanding shares, motivated in part by management's view that the stock is currently undervalued. The board retains authority over execution timing and terms.

• LATAM reinstated full guidance for 2026 and upgraded the overall outlook, with the midpoint of adjusted EBITDA guidance increased by $250 million from prior estimates, after demonstrating resilience in Q2 2026 which management expects to be the most challenging quarter of the year.
• Full-year 2026 capacity growth is projected between 9% and 10% year-over-year, with total revenues expected between $17.3 billion and $17.7 billion.
• Adjusted EBITDA guidance is updated to between $4.1 billion and $4.4 billion.
• Passenger CASM ex-fuel is expected to remain in the prior guidance range of 4.5 to 4.7 cents, with the Brazilian real exchange rate assumption unchanged at 5.15.
• Year-end 2026 liquidity is projected to be at least $4.7 billion, with adjusted net leverage expected to be equal to or below 1.6x.
• Updated fuel price assumptions are $147 per barrel for Q3 2026 and $130 per barrel for Q4 2026, reflecting current market conditions.

Total consolidated revenues grew 28% year-over-year to nearly $4.2 billion for Q2 2026. Passenger revenues, the largest segment, grew 28% year-over-year, with premium revenues contributing 29% of total passenger revenues, growing faster than main cabin revenues. LATAM Pass membership generated over 67% of passenger revenues, up from 60% previously, and elite member third-party sales grew 48% year-over-year. Cargo revenues grew nearly 22% year-over-year, supported by higher yields and growing tonnage transported, with short booking cycles enabling flexible pricing adjustments. Adjusted operating margin hit 5.4%, and the group delivered positive net income of $125 million. Adjusted operating cash flow reached $476 million, with ending total liquidity of more than $4.2 billion, equal to 26.2% of the last 12 months' revenues, and adjusted net leverage held at 1.5x.

• Sustained high jet fuel price volatility remains the primary near-term risk, with management expecting ongoing price volatility through the end of 2026, creating ongoing cost uncertainty.
• Macro economic weakness in specific regional markets creates uneven demand trends: Argentina is seeing slower demand linked to its domestic economic situation, and Chile has seen weak economic growth over the past 6-7 months pressuring domestic demand.
• U.S. visa policy changes previously created modest weakness in travel between South America and the U.S., though this trend has improved slightly in Q2 2026.
• All forward-looking guidance is based on current assumptions, and actual results may differ materially due to unforeseen changes in market conditions, fuel prices, and macroeconomic factors.

Q: What were the geographic demand trends for international routes in Q2 2026, specifically for North America, Europe, and regional South American markets? / A: Management reported that international demand was solid across all key markets. Demand on South America to U.S. routes improved slightly compared to prior quarters that saw weakness from visa policy changes. European demand remains very solid, with a slight temporary slowdown from the FIFA World Cup that held back Q2 results slightly. Regional South American demand saw slower activity in Argentina linked to that country's current economic situation, while the northern portion of South America is performing well, with no major concerns across the international segment overall.

Q: What is a reasonable 2027 capacity growth assumption for LATAM, and if fuel prices decline, will the industry be able to retain most of the 2026 fare increases? / A: LATAM's Embraer E2 deliveries will mostly impact 2027 capacity, as most 2026 deliveries will not enter service until late Q4, and 2027 capacity plans are not yet finalized. Retention of fare increases if fuel prices decline will ultimately depend on overall industry capacity, but historical trends show that high fares tend to adjust downward slowly after they are raised. LATAM currently sees strong, stable demand especially in the premium segment, and 2026 capacity deployment is well matched to current demand.

Q: Will LATAM use the new low-interest credit line from the Brazil Development Bank, and what drove the shift in domestic capacity guidance that raised growth projections for Brazil while lowering projections for Spanish-speaking domestic markets? / A: LATAM is participating in the credit program and is in ongoing discussions with the bank regarding execution details. The higher domestic Brazil capacity guidance reflects stronger observed demand, new network expansion opportunities from the upcoming Embraer E2 fleet entry, and the robust demand outlook for the Brazilian market. The lower growth guidance for Spanish-speaking markets reflects ongoing weak economic growth in Chile that has softened domestic demand, with capacity shifted to Brazil where more attractive growth opportunities exist.

Q: What drove the negative fuel hedging result in Q2 2026, and how should this line be forecast going forward? What is the outlook for competition in the Brazilian domestic market? / A: The negative Q2 result came from premiums paid for additional call options purchased to protect against rising fuel prices; the premium cost outweighed settlement gains in the quarter. Hedging protection levels are lower for Q3 2026, so premium-related negative impacts will be smaller. For the Brazilian market, LATAM has a very solid competitive position with a leading market share in key hubs, the domestic market is growing dynamically, and current industry capacity growth is consistent with market demand, giving LATAM a positive outlook for the second half of 2026.