LATAM Works To Fill Void Left By Viva In Colombia

LATAM airlines 767-300F
Credit: Markus Mainka / Alamy Stock Photo

LATAM Airlines Group is working to fill the gap created by Colombian ULCC Viva suspending operations. 

Viva grounded its operations Feb. 27 after entering a voluntary restructuring earlier that month. Colombia’s largest airline Avianca has been attempting to acquire Viva for a year but has failed to gain regulatory approval for the transaction. Due to the lag in gaining approval, Viva said it has been unable to access capital for nine months. 

Before Viva grounded its operations, South American ULCC group JetSMART and LATAM Airlines Colombia expressed an interest in acquiring the ULCC. 

LATAM Airlines Group CEO Roberto Alvo told analysts and investors during a March 10 earnings call that Viva’s market share was roughly 20%. LATAM Airlines Colombia is the country’s second largest operator behind Avianca. 

“We have brought five aircraft to Colombia this month,” Alvo said. “Two of them are already operating. The other three will be operating by the end of the month.” Aviation Week Network’s Fleet Discovery shows LATAM Airlines Colombia has nine Airbus A319s and A320ceos in service. One aircraft is in storage. 

Alvo said LATAM sees the situation in Colombia as “an important opportunity to strengthen our position in one of the most important markets in the region.” 

As it works to fill the void left by Viva in Colombia, LATAM Airlines Group is in the midst of converting Boeing 767 passenger jets into cargo freighters. The company has completed conversions of four aircraft, with the remaining six conversions scheduled for completion this year and next year. LATAM also said it was selling three of its cargo freighters and expects to operate 19 freighters in 2024 compared with 20 in 2023. 

The company’s total fleet comprises 237 Airbus narrowbodies, 57 Boeing widebodies and 16 Boeing cargo freighters. LATAM projects ending 2023 with a fleet of 323 aircraft. 

LATAM’s capacity in the 2022 fourth quarter (Q4) was 83.2% of 2019 levels, which the company said was its highest level of operations since the beginning of the coronavirus pandemic. The company projects its capacity in 2023 to increase 20% to 24% year-over-year. 

Its total Q4 revenue grew 37.5% year-over-year to $2.7 billion but was 4% below the same time period in 2019. LATAM’s operating expense in the quarter was $2.6 billion compared to $1.8 billion in Q4 2021. LATAM posted Q4 net income of $2.5 billion compared with a $2.6 billion loss the year prior. 

LATAM recorded revenue of $9.5 billion for 2022 compared with $5 billion in 2021. The airline’s expenses increased from $6 billion in 2021 to $9.6 billion in 2022 largely due to rising fuel costs. The company’s profit was $1.3 billion. In 2023, LATAM expects its passenger unit costs excluding fuel to fall between 4 cents and 4.1 cents. 

Lori Ranson

Lori covers North American and Latin airlines for Aviation Week and is also a Senior Analyst for CAPA - Centre for Aviation.