LATAM Airlines Raises 2026 Core Earnings Forecast on Lower Fuel Price Expectations

LATAM Airlines on Tuesday raised its full-year 2026 guidance for core earnings, citing an improved outlook for jet fuel prices that had previously surged due to geopolitical conflict. The adjustment signals growing confidence in its operational resilience despite ongoing market volatility.

Revised Earnings Outlook

The airline now projects 2026 adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to be in the range of $4.1 billion to $4.4 billion. This represents an increase from the $3.8 billion to $4.2 billion range the company forecast in May, according to a company announcement.

Latin America’s largest airline also estimated its capacity growth for the year would be between 9% and 10%. The updated forecast, however, remains below the $4.2 billion to $4.6 billion guidance issued in December before the conflict-related oil shock.

Easing Fuel Cost Pressures

The primary driver for the revised outlook is a more favorable fuel price scenario. Chief Financial Officer Ricardo Bottas said the airline is now assuming oil prices of around $150 per barrel for the third quarter and $130 for the fourth quarter, down from previous estimates of $170 and $150, respectively.

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While these prices remain significantly higher than the pre-conflict assumption of around $90 per barrel, Bottas said the improvement justified the upgrade. He added that LATAM's business model had passed a "test" and that the company was increasingly confident in a gradual recovery of the operating environment.

Second-Quarter Performance

The upgraded forecast was released alongside LATAM's second-quarter results. The airline reported a net profit of $125.2 million, down from $241.6 million in the same period a year earlier.

Revenue climbed 27% to $4.12 billion, with strong passenger traffic leading growth. The impact of the energy shock was evident in the quarter, as fuel costs nearly doubled year-over-year, adding what Bottas described as more than $800 million in additional expenses for the period.