# LATAM Posts $125 Million Profit Despite 93% Fuel-Cost Surge, Plans 42 Embraer Routes *Airline unveils the first phase of its E195-E2 operation in Brazil, with 42 routes planned by March 2027, and says it is studying 18 additional destinations for a second phase.* - Published: 2026-08-04 - Updated: 2026-08-05 - Section: Insights - Tags: 2026 guidance, airline earnings, airline routes, Brazil Aviation, E195-E2, Embraer, fuel costs, Infrastructure, latam - URL: https://brazilstockguide.com/insights/latam-profit-42-embraer-e195-e2-routes-brazil/ ![](https://i0.wp.com/brazilstockguide.com/wp-content/uploads/2026/08/E195-E2_LATAM.jpg?fit=3840%2C2161&ssl=1) **By Brazil Stock Guide** – LATAM Airlines unveiled a package of announcements on Tuesday combining resilient second-quarter results, a stronger 2026 outlook and a new phase of expansion in Brazil. Despite a 93% increase in fuel costs, the airline posted net income of $125 million, raised its full-year guidance and detailed the first stage of its Embraer E195-E2 operation, with the aircraft due to enter service in late November. Ticket sales for the new flights will begin on Wednesday. The first phase will involve between 12 and 14 aircraft operating across 42 domestic routes from November 2026 through March 2027, including eight new routes and four new destinations: Cabo Frio, Ji-Paraná, Macaé and Rondonópolis. “What you are seeing is the first step,” LATAM Brazil Chief Executive Jerome Cadier said. “Sales will open tomorrow, flights will begin in the last week of November, and the operation will grow as we receive additional aircraft.” #### More than new routes Cadier said the Embraer E195-E2 will not be used solely to open smaller markets. It will also allow LATAM to increase frequencies and improve connectivity across its existing network. “It is important to understand that the product improves when a city currently served by one daily flight can instead receive two E2 flights, one in the morning and another in the afternoon,” he said. “There are many routes where we will expand our operation by adding more daily flights, in addition to these eight new routes.” Cadier cited Rondonópolis, in the state of Mato Grosso, as an example. A passenger travelling from the city to Barcelona currently needs to take three flights and spend more than 20 hours in transit. Once LATAM begins flying from Rondonópolis to São Paulo’s Guarulhos airport, the journey will require only one connection and could take less than 15 hours. The first phase also includes new services between Brasília and Ribeirão Preto, Curitiba and Londrina, Curitiba and Cuiabá, and Porto Alegre and Viracopos. LATAM will also increase capacity on routes including Guarulhos-Cascavel, Rio de Janeiro Galeão-Curitiba, Porto Alegre-Curitiba, Guarulhos-Uberaba, Guarulhos-Palmas and Guarulhos-Uberlândia. #### Brazil remains central to LATAM’s strategy Cadier used the presentation to argue that Brazil’s aviation market remains well below its potential. Brazil records roughly 0.5 air trips per capita each year, according to the executive, about half the level seen in Chile and far below rates in Europe and the United States. “We need to understand that Brazil can double the size of its aviation market over the next ten years,” Cadier said, calling for a long-term plan focused on regulatory stability, lower operating costs and greater efficiency across the domestic aviation industry. He also renewed his criticism of the sector’s rising tax burden, high jet-fuel costs, excessive litigation and regulatory uncertainty, which he described as obstacles to growth. Cadier said Brazil’s tax reform could significantly increase the taxes charged on airline tickets, even though the original premise was to preserve the existing tax burden. He also cited income tax on aircraft leasing transactions, the IOF financial-transactions tax, and airport, labor and air-navigation costs. #### Profit despite the fuel shock LATAM reported second-quarter revenue of $4.2 billion, up 27.6% from a year earlier. Net income reached $125 million, while the adjusted operating margin stood at 5.4%. Fuel was the main challenge during the period. According to group Chief Financial Officer Ricardo Bottas, jet-fuel expenses increased 93%, representing more than $800 million in additional costs in a single quarter. “That was the scale of the challenge we faced, and even so, we delivered EBITDA of $713 million, operating income of $227 million and net income of $125 million,” Bottas said. Consolidated capacity increased 8.9%, while the airline carried 21 million passengers. The load factor stood at 81.8%, down 1.7 percentage points, and passenger unit revenue rose 17.5%. In Brazil’s domestic market, capacity grew 5.7%, with a load factor of 80.7%. LATAM carried 9.5 million passengers in the country during the quarter, while passenger unit revenue increased 23.7% in dollar terms and 12.2% in Brazilian reais. #### Guidance raised as fuel outlook improves LATAM updated its 2026 outlook after lowering its jet-fuel price assumptions. Adjusted EBITDA is now expected to range from $4.1 billion to $4.4 billion, compared with a previous forecast of $3.8 billion to $4.2 billion. The airline also resumed publishing its full guidance, forecasting passenger capacity growth of between 9% and 10% and revenue of between $17.3 billion and $17.7 billion this year. Adjusted operating income is expected to range from $2.1 billion to $2.3 billion, implying an operating margin of between 12% and 13%. The company also expects to generate more than $1.3 billion in leveraged free cash flow. The outlook assumes average jet-fuel prices of $147 per barrel in the third quarter and $130 in the fourth quarter, as well as an exchange rate of R$5.15 per dollar. #### Cash rises as leverage remains low Despite the pressure from fuel costs, LATAM generated $476 million in adjusted operating cash flow during the quarter. After net investments of $168 million, the airline ended June with $2.65 billion in cash, an increase of $110 million from the beginning of the quarter. Including available credit facilities, total liquidity reached $4.23 billion, equivalent to 26.2% of revenue over the previous 12 months. Adjusted net leverage remained at 1.5 times EBITDA, below the two-times ceiling established under the company’s financial policy. LATAM also approved a share-buyback program covering up to 5% of its outstanding shares. The program may be executed over the next five years at the discretion of the board of directors. #### Premium revenue gains importance Another highlight of the presentation was the improving quality of LATAM’s revenue base. Bottas said premium products now account for 29% of passenger revenue. Premium revenue grew nine percentage points faster than main-cabin revenue and tends to be more resilient during periods of disruption or economic stress. In addition, 67% of passenger revenue is generated by customers enrolled in LATAM Pass, which has reached 56 million members. The number of elite members increased 26% from a year earlier, while sales to program partners rose 48%. #### Second phase already under review Although LATAM only announced the first stage of the E195-E2 operation, the airline said further expansion is already being planned. Cadier said the company is evaluating 18 potential destinations for the second phase, which is expected to begin in April 2027. “We are studying close to 18 destinations,” he said. “We are unlikely to launch all 18 as new destinations, but these are 18 potential cities currently under review.” The decision will take into account corporate demand, tourism potential, improved network connectivity, economic viability and the operational and safety conditions of each airport. The second phase is expected to be announced within the next three to four months. Asked about LATAM’s 50 additional purchase options for the E195-E2, Cadier said any decision would depend on the airline’s initial operating experience with the aircraft. “It is difficult to decide whether to exercise an option when we have not even begun flying the aircraft yet,” he said. Cadier closed the presentation by describing the announcement as a milestone for the airline. “Today is a very important day in the history of LATAM Brazil,” he said. “We are very proud to continue investing in the country and to continue believing in the country.” --- Source: Brazil Stock Guide, https://brazilstockguide.com/insights/latam-profit-42-embraer-e195-e2-routes-brazil/