LATAM Airlines has raised its full-year earnings forecast after a more favourable outlook for jet-fuel prices reduced some of the financial pressure created by the Middle East conflict, offering a cautiously positive signal for Latin America’s largest airline group.
The Santiago-based carrier now expects adjusted earnings before interest, tax, depreciation and amortisation of between $4.1 billion and $4.4 billion in 2026. Its previous forecast, issued in May, had placed the figure between $3.8 billion and $4.2 billion.
The revision follows a reduction in the company’s fuel-price assumptions for the second half of the year. LATAM now expects jet fuel to average approximately $150 per barrel during the third quarter and $130 in the fourth quarter.
Those prices remain significantly above the roughly $90 per barrel assumed before the latest Middle East crisis disrupted energy markets and international shipping. However, they are lower than the airline’s previous expectations of $170 in the third quarter and $150 in the fourth.
Revenue rises despite lower profit
LATAM reported second-quarter revenue of $4.12 billion, an increase of 27 per cent compared with the same period a year earlier. Passenger operations remained the main source of growth, while the group’s cargo business also contributed to higher sales.
Net profit nevertheless fell to $125.2 million from $241.6 million in the corresponding quarter of 2025. The decline largely reflected the sharp rise in fuel expenses, with the airline estimating that it absorbed more than $800 million in additional fuel costs during the quarter.
LATAM’s management said the results demonstrated the ability of its network and commercial model to withstand an unusually severe cost shock. The company operates passenger and cargo businesses across several Latin American markets, allowing it to shift capacity and adjust prices as conditions change.
The airline expects its total passenger capacity to expand by between 9 and 10 per cent during 2026, although management has warned that geopolitical uncertainty could continue to affect fuel prices and travel demand.
Brazilian network set for expansion
LATAM has also announced the first phase of operations involving its new Embraer E195-E2 aircraft in Brazil. Up to 14 of the Brazilian-built jets are expected to enter service between late 2026 and early 2027.
The aircraft will be deployed across 42 routes, strengthening connections between LATAM’s major hubs and regional cities. The company is targeting markets with significant corporate demand, including areas supported by agriculture, energy and oil production.
A further 18 potential destinations are being evaluated for inclusion in the network from April 2027.
The E195-E2 is smaller than many of the Airbus aircraft currently used by LATAM on domestic services. Its size could allow the airline to operate routes where passenger demand is strong enough to support regular flights but insufficient for larger aircraft.
Improved outlook remains vulnerable
LATAM’s upgraded forecast is an encouraging development for the broader Latin American aviation sector, which has faced volatile currencies, high borrowing costs and rising operating expenses.
However, the company’s results also show how quickly fuel prices can erode airline profitability. Revenue growth was not enough to prevent quarterly net income from falling sharply when energy costs surged.
Any renewed disruption to oil supplies or shipping through the Strait of Hormuz could force LATAM to revise its assumptions again. For now, easing fuel pressure and continued passenger demand have given the airline greater confidence that it can maintain growth while protecting earnings during the remainder of 2026.
Newshub Editorial in Latin America – 5 August 2026
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