By Brazil Stock Guide – Latam Airlines Group (SSE: LTM) enters 2026 harvesting the benefits of a repositioning strategy built slowly — but rigorously — since the pandemic. Latam was also the first among the country’s three major carriers to enter Chapter 11, filing in May 2020, and the first to exit, completing its restructuring in November 2022. The carrier emerged from the process not just stabilized but deliberately strengthened: with lower leverage, more competitive operating costs and a clear priority — capturing and retaining the high-yield corporate passenger.
Now, as Brazil’s airline sector regains symmetry with Gol out of judicial recovery and Azul approaching the same stage, Latam says its strategy has never depended on competitors’ timelines. CEO Jerome Cadier notes that the company was always focused on “exiting well,” not necessarily “exiting fast,” a stance the current numbers appear to validate.
The repositioning first showed up in service quality. Latam remains among the five most punctual airlines in the world according to Cirium, won ANAC’s award for Brazil’s most on-time carrier, and lifted its Net Promoter Score to 55 — a sharp jump from the roughly 15 points registered three or four years ago. The company cut complaints, reduced call-center wait times and advanced its digital service model, solving issues earlier in the customer journey with fewer touchpoints.
On the product side, the upgrade is sweeping: retrofitted A319s and 787s with the new business-class cabin, the introduction of Premium Comfort on widebodies, and a long-haul Wi-Fi rollout beginning in late 2026 and scaling through 2027. Lounge investments also mark this phase; the new Lima lounge has already opened, while the much larger Guarulhos flagship will debut in 2027.
Latam’s broader footprint also reflects this strategy. Since 2021, the group has expanded its Brazilian presence from 44 to 63 airports — the largest domestic network build-out among the major carriers in recent years. Internationally, it now connects Brazil to 90 destinations worldwide, including 24 served with nonstop flights, a scale unmatched by any other airline operating in the country.
These gains in efficiency, service and product lay the groundwork for the next step — a robust network expansion in 2026. Latam is expected to close the year with 63 domestic destinations, a historic high, and will continue adding routes even before the arrival of the new Embraer E195-E2 fleet.
The airline will open routes such as Guarulhos–Uberaba, Guarulhos–Juiz de Fora, Brasília–Campina Grande and Guarulhos–Caldas Novas, while also launching new international links from São Paulo to Amsterdam, Brussels and Cape Town — moves that reinforce Guarulhos as the group’s primary global hub. Cadier says the E2 jets will unlock additional regional expansion by serving markets that require more efficient, flexible aircraft; the first batch of 12 aircraft alone has the potential to transform the group’s domestic reach.
CFO Ricardo Bottas highlights that this growth is embedded in the most ambitious fleet plan in Latam’s history. The group — now at 363 aircraft — is expected to end 2025 with 371, reach roughly 410 in 2026 and hit 422 in 2027. The five-year order book exceeds 140 new aircraft from both Airbus and Embraer’s E2 family. From 2027 onward, the arrival of the Airbus A321XLR will open medium-haul international markets that today lack adequate density, offering new flexibility across underserved regions.
The expansion is anchored in what Latam calls its “strategic asset”: a solid financial profile. In 3Q25, the company posted an 18% operating margin, EBITDA of $1.1 billion and net income of $379 million, supported by more stable fuel prices and strict cost discipline per available seat. Free cash flow reached $380 million even after substantial investments in fleet, retrofits and technology, while the company maintained liquidity equivalent to 26% of annual revenue.
Leverage held at 1.5× EBITDA, below the 2.0× ceiling defined in its financial policy. Latam also extended its debt profile, pushing its first material maturity (excluding aircraft financing) to 2030, and executed $433 million in share buybacks during the quarter while keeping its cash position nearly unchanged from the start of the year.
Cargo — another engine of growth — continues to expand. The rise of e-commerce led to the installation of a new high-capacity automated sorter in Guarulhos, boosting the efficiency of small-package processing and strengthening the hybrid belly-cargo model, which scales naturally as the fleet grows. The arrival of four additional 787s by late 2026 will further reinforce this segment.
Cadier sums up the next phase: Latam enters 2026 with a rare combination — controlled costs, a stronger product, a growing fleet and resilient corporate demand. The renewed competitive landscape does not alter the company’s direction; instead, it underscores that Latam exited Chapter 11 at the right speed and with a sustainable strategy. “We didn’t accelerate too much, and we didn’t stand still. We invested cautiously but with conviction. Now, with the E2s arriving, our network will become even more competitive,” he said.
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