LATAM Airlines stock faces fuel pressure after Q3 profit rises

Published on 11/12/2026 at 03:51 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWS

LATAM Airlines stock is balancing strong demand against a sharp rise in fuel costs. Revenue guidance increased as the earnings outlook weakened.

Fuel costs reshape LATAM outlook

Third-quarter revenue increased 18.4 percent to USD 4.57 billion, while net income reached USD 441 million.
Higher fuel prices pushed LATAM to lower its 2026 adjusted EBITDA outlook and raise its revenue guidance.
The airline expects at least USD 1.2 billion in adjusted levered free cash flow for 2026.

Latam Airlines, US50046P1057, Illustration mit AI erstellt.

LATAM Airlines Group delivered stronger demand and higher revenue in the third quarter, but surging jet fuel costs forced the airline to reduce its profitability outlook. Brazil Stock Guide reported on November 3 that net income attributable to shareholders rose 16.3 percent year over year to USD 441 million, while operating revenue increased 18.4 percent to USD 4.57 billion.

Strong demand, weaker margins

Passenger revenue rose 17.8 percent to USD 4 billion and cargo revenue increased 19.5 percent to USD 483 million. LATAM carried 23.5 million passengers, while capacity expanded 7.7 percent. Premium-related revenue grew 23 percent, helping the group offset part of the cost shock.

The pressure was visible in profitability. Adjusted EBITDA declined 4.7 percent to USD 1.095 billion, and the adjusted EBITDA margin narrowed to 24 percent from 29.8 percent a year earlier. Fuel expenses climbed 60.9 percent to USD 1.57 billion as average jet fuel prices rose 52.1 percent, including hedging costs.

Guidance shifts toward cash generation

LATAM lowered its 2026 adjusted EBITDA forecast to USD 3.9 billion-USD 4.05 billion from USD 4.1 billion-USD 4.4 billion. The expected adjusted operating margin was cut to 10.5 percent-11.5 percent from 12 percent-13 percent, while revenue guidance increased to USD 17.6 billion-USD 17.8 billion.

Management expects higher jet fuel prices to add more than USD 2 billion to costs in 2026, including more than USD 900 million in the fourth quarter. The group nevertheless targets at least USD 1.2 billion in adjusted levered free cash flow and a double-digit adjusted operating margin. Capacity growth in Brazil was trimmed to 7.5 percent-8.5 percent from 8 percent-9 percent.

What investors should watch next

The next operational milestones include the planned November 30 start of commercial service for LATAM's first two Embraer E195-E2 aircraft in Brazil. The group ended the quarter with 390 aircraft and expects to reach 409 by December, with a target of 426 aircraft by the end of 2027.

LATAM Airlines stock traded at USD 49.26 on the NYSE at 4:00 p.m. EST on Wednesday, November 11. The quote is in U.S. dollars and is not paired here with an Xetra closing comparison.

Business model and competition

LATAM Airlines Group provides passenger and freight air transport across Chile, Peru, Ecuador, Colombia, Brazil, other Latin American markets, the Caribbean, North America, Europe and Oceania. The Santiago-based group also offers ground handling, courier, logistics and aircraft maintenance services. In Brazil, it competes with Azul and GOL, while Avianca is another important Latin American airline competitor; LATAM's broader regional and international network gives it a wider geographic footprint than operators focused on individual domestic markets.