Hello, and welcome to the Fourth Quarter 2024 LATAM Airlines Group Earnings Conference Call. My name is Alex. I'll be coordinating the call today. [Operator Instructions] Before I turn the call over to management, I'd like to remind you that certain statements in this presentation and during the Q&A may relate to future events and expectations, and as such, constitute forward-looking statements. Any matters discussed today that are not historical facts, particularly comments regarding the company's future plans, objectives and expected performance or guidance, are forward-looking statements. These statements are based on a range of assumptions that LATAM believes are reasonable, but are subject to uncertainties and risks that are discussed in detail in the published 20-F, 2025 guidance earnings release, financial statements and related CMF and SEC filings. The company's actual results may differ significantly from those projected or suggested and any forward-looking statements due to a variety of factors, which are discussed in detail in our SEC filings. I'd now like to turn it over to the management team to begin. Please go ahead.

Hello, everyone, and good morning. Welcome to the fourth quarter and full year 2024 conference call, and thank you, all of you, for joining us today. My name is Andres Valle, Vice President of Corporate Finance at LATAM Airlines Group. Here with me today is Roberto Alvo, our CEO; Mr. Ricardo Bottas, our CFO, who recently joined the team; and Tori Creighton, Head of Investor Relations, and we will present our highlights and results for the fourth quarter and full year 2024. I will hand it over to Roberto to share opening remarks over the quarters' and year's highlights. Once he's finished, I'll present them in more detail, alongside the financial results. Over to you, Roberto.

Thank you, Andres. Good morning, everyone, and thank you for joining us to review LATAM's group performance for the fourth quarter and full year results. Before we begin, on behalf of LATAM Airlines, I'd like to express our deepest condolences about the recent accident in Washington. Our thoughts are with the loved ones of passengers and crew on board of the aircraft and the helicopter and the American Airlines team during this difficult time. Also, before I turn to the results, I'd like to invite Ricardo to introduce himself. He has a proven track record of over two decades and vast experience in corporate finance, financial planning, tax, accounting and investor relations, among other areas, working for multinational public companies in Brazil. He was also a CEO for a few years, and it's great to have him here. So Ricardo, over to you.

Thank you, Roberto. First of all, I'm thrilled to be joining LATAM Airlines. I've always admired it. It's an exciting time, and it's the best moment in the history of the group. But for sure, there's still a lot to be done, and I'm looking forward to the challenge. As Roberto mentioned, I've worked in finance in many different roles, in different industries related to healthcare, insurance and energy. And now I'm joining the aviation industry, and I couldn't be more excited to work together with LATAM's teams from now on. So thank you, Roberto, again, and back to you.

Thank you, Ricardo. Overall, 2024 was a year of significant achievements for LATAM, not only in the financial sense, in which we successfully met our 2024 updated guidance, but also with respect to our customer satisfaction, our operations and our capacity to profitably grow, not only on our passenger operations, but also in our Cargo business and loyalty program. The results, in my view, are a testimony of the resilient model we have built over the years that allow us to achieve these results in the context of very dynamic macroeconomic and competitive environment. We're incredibly proud of this accomplishment, which wouldn't have been possible without the hard work and dedication of our more than 38,000 employees. Thank you very much to each one of you. You are the engine that is driving LATAM today. In terms of operations, during the quarter, LATAM Group grew approximately 12% compared to the previous year and grew 15% for the full year, while maintaining healthy load factors, highlighting our ability to grow efficiently. For the full year, we transported a record-breaking 82 million passengers, further solidifying our role as a key player in connecting people across 151 destinations in 27 countries and allowing South America to be connected within itself and the world. These achievements reinforce LATAM Group's position as the number one carrier by market share in five domestic markets and the leading airline group in South America. The group Cargo operations also delivered robust results during the second half of 2024, ending the year with improved load factors, better unit revenue and showcasing operational growth. Similarly, as of the end of the year, our frequent flyer program, LATAM Pass, reached 49 million members, reaffirming its position as the largest loyalty program in the region. LATAM's financial results also reflected continuous cost…

Thank you, Roberto. Let's move to the following slide, please. Diving deeper into fourth quarter operating figures, LATAM Group continues to show robust operational growth year-over-year with more passengers choosing us across all markets. In this sense, during the quarter, the group transported 21.5 million passengers. This is a 7% increase compared to fourth quarter of 2023 and achieved a record breaking 82 million passengers for the full year, reinforcing LATAM as the largest airline group in South America and was the top 10 globally in terms of seats. Also, during this period, capacity grew by approximately 12%, while maintaining healthy load factors across all segments, with a notable consolidated load factor of almost 86% for the quarter. In terms of consolidated revenues per ASK, we see a decrease of 10% year-over-year, though stable compared to the third quarter of 2024. This increase was influenced by the decline in jet fuel prices year-over-year and by currency depreciation in some of our main markets, especially in Brazil, since RASK are presented in USD. However, when analyzing RASK in local currency, we observed an average increase of 30% among Spanish-speaking countries, where LATAM Group's affiliates operate. In Brazil, however, the comparison base is exceptionally high from the fourth quarter of 2023. LATAM Group's diversified network and strong value proposition has enabled us to deliver solid results this quarter with improved margins that we can see now on Slide 5. In this fourth quarter, LATAM continued to consolidate the trend of strong financial performance, achieving an adjusted operating margin of 13.6%, supported by revenue growth and cost discipline. Total revenues increased by 4% year-over-year, driven by a remarkable 29% growth in Cargo revenues, marking the third consecutive quarter of improvement. Total adjusted operating expenses increased by only 1% in the quarter, primarily driven…

[Operator Instructions] Our first question for today comes from Michael Linenberg of Deutsche Bank.

Oh, yes. Hi, good morning, Roberto, Andres, Ricardo, Tori. And by the way, a warm welcome to Ricardo. Not only are you joining an airline that is a leader in Latin America, but I think many viewed as the gold standard on a global basis. So welcome aboard. I have two questions here. And maybe the first one to Andres and/or the team. You reiterated your December 3, guidance. And yet, over the past two months, we've seen the currency depreciate pretty meaningfully against the dollar, as well as fuel prices moved up. And so my question is, what are you seeing with respect to the pass-through of basically the higher cost of doing business that, gives you confidence that you feel good about reiterating these numbers, the margins and revenue growth?

Thanks, Mike. This is Roberto, I'll take the question, and thanks for the compliments as well. Well, our guidance has $90 per barrel of jet fuel and R$5.8 at the current levels on both commodities are not very far from that, even though we've seen, of course, volatility. At this point in time, I think that we still feel very confident about our guidance. The booking curve in the first few months of the year, is healthy and solid in almost every line of business where we have. Taro has bounced back nicely as well since the second semester of last year, through the beginning of this year as well. And I think that the ability we have to diversify our portfolio, move our assets around make sure that this is an opportunity for LATAM remains. One of the things I told you in past calls is that one of the things that we build is, something I call relative strength. And actually, in these moments of volatility is when I think that our position allows us to take advantage of that relative strength, and eventually induce opportunities of us solidifying our network and our presence. So we remain confident we have the tools, we believe to overcome this volatility. I mean, be mindful that the real depreciated 20% in 2024. It was before below 5% at the beginning of the year and ended in 6%. And despite of that, we were able to deliver the results we had in 2024. So we remain optimistic, and confident that we have the ability to do that in 2025.

Great. And then just my second question on - go ahead.

Go ahead. No, go ahead. Go ahead.

Just my second question. Hearing your sort of potential opportunity with respect to capital deployment, shareholder returns, considering a share repurchase, are there any restrictions, or mitigating factors that you mentioned $150 million on size. I realized that a good portion of your float is held by insiders. Is that one of the gating issues in sizing a potential share repurchase? If you could talk about that? And again, thanks for taking my questions.

Thank you, Michael. So first, just to remind particularly people in the U.S. that are not necessarily very close to Chilean loss, either dividend distribution at the end of the policy over 30%, or buybacks need to be approved by shareholders, okay? So this is not a Board decision. Board can recommend. Ultimately, shareholders make that decision. So we will do that in case we decide to move in this direction. Yes, we are mindful of the liquidity of the share. These operations are not very typical in Chile either. I mean there's very few cases, and none of relatively important size. So we want to analyze the law provides for this, so it can be done. But of course, we want to analyze very well the feasibility of doing that. But the size is limited today, basically to our understanding that we don't want to impact the liquidity of the shares, particularly in the U.S. market. So that's a constraint we have very much in mind today.

Great, thanks and great quarter everyone.

Thank you.

Thank you. Our next question comes from Jens Spiess of Morgan Stanley. Your line is now open. Please go ahead.

Yes, hello. Congrats on the strong results, to finish and wrap up the year. I just had a question on prices mainly. I mean looking at Brazilian market, in local currencies, your prices are down. So if you could just explain a bit more what's going on there? And if you see further pressure going forward? And also, on the international side, understand what's mainly driving the decrease in prices? Is it more interregional international flights? Or is it long haul? In terms of mix, how should we think about it? Thank you.

Yes. So traffic in domestic Brazil remains healthy. And last quarter of 2023 was, in particular, very strong. So there's a very high basis of comparison vis-a-vis 2023. In absolute terms, nonetheless, during 2024, we saw a healthy movement of yields in domestic Brazil. And at this point in time, we have no indication that demand will not continue to be healthy going forward. With respect to international, it's been relatively across the board. I would say that Brazil to Europe - Latin America to Europe, in general, has been very healthy. A little bit less so to the U.S., but still in good healthy figures. And regional, which is international within South America, had a very nice rebound as well. Do we - do remember that international was the last segment to recover from the pre-pandemic level. So what we saw in 2024 was still probably the last bit of the recovery, and that's why also we grew around 20% in international. But there are no segments in international that are particularly concerning us, whether it's the regional, again, international within South America or the long haul.

And I would complement that, of course, whenever currencies depreciate, we see, I think, a pickup in inbound traffic from coming to South America, I think, which becomes, more traffic. And we definitely see that across all markets inbound traffic.

Okay. Understood. Yes. On that last point, that's what I'm trying to dissect. So because international, obviously, you're probably seeing some weakness on the interregional flights, which is volatility in the local currencies, but also it could end up being positive for long haul, right, in terms of pricing?

Yes, I don't think we have seen weakness. Probably I misexplained myself. I think that regional, so international windows America has been solid. And what Andres says is very important. So let me just give you an example. There's a currency depreciation in Brazil, we do know, but there's actually in real terms a currency appreciation in Argentina. And Argentines love to travel. So you see a significant increase in outbound traffic from Argentina through our hubs, to long haul within the region. So at the end of the day, the volatility we've seen in the currency this year has been, in a way, counterbalanced by other markets. We see, in general, strong flows in almost every one of our international segments, whether it's within South America or long haul.

Perfect. Very clear. Thank you.

Thank you.

Thank you. Our next question comes from André Ferreira of Bradesco. Your lines are open. Please go ahead. André Ferreira: Hi, good morning. Thanks for taking a question. Congrats on the results. Two topics here. So first, about the fleet plan, it looks like it relies on a significant increase of the number of meters being delivered, and also significantly more than what was delivered in 2024. So my question is, if you see risk of this being hampered by further delays in deliveries by Airbus? And my second question, it looks like the combination of Azul and Abra or Gol is advancing. I just wanted to get your view on, I mean, how would this impact LATAM? How would this impact the local fare environment? And if it changes anything in LATAM's longer-term strategy for Brazil if it goes ahead? Thank you.

Yes. Thank you, [Guilherme]. So we do have 22 Airbus 320 arrivals 320 family arrivals in 2025. We are not concerned today with the delivery stream from Airbus. Actually, I believe that this relatively high fleet in coming this year is an advantage for LATAM, because I think it will allow us to take advantage of our relative strength going forward. We have two 787s arriving in 2025. Probably there's risk of delays there, but we're monitoring very closely Boeing's increasing production. They're trying to recover the 787 production. So we remain very attentive to that. But I would say that there is no big concern that, we have internally with respect to our fleet plan in 2025. I would say probably that more than the deliveries, it's the engine situation. The one that we're monitoring more closely as Pratt & Whitney and Rolls-Royce have had issues with their supply chains. We've had a very productive interactions with them. We have a few 787s, three at this moment on ground and seven 325 family aircraft on ground. It's a relatively low number. And we have very constructive conversations with them, and this is what we're monitoring more closely. But that risk is, of course, included in our guidance so far. With respect to your second question, I mean, what we have today seen as everybody, is a nonbinding MOU that had a little detail on this transaction. I think it's still premature to opine on what this exactly will mean for LATAM. This is a big potential combination that we'll have no doubt mitigations, if approved, and we are expecting to see what, are the mitigations that Abra and Azul will propose. And then we'll have a better understanding of what this will mean. So in the meantime, we have improved our presence in domestic Brazil in 2024. We are almost 40% of the market. And I think, we're very happy with the performance of our domestic operation in that market. So we'll see what happens in the next weeks and months. André Ferreira: Thank you.

Thank you. Our next question comes from Stephen Trent of Citigroup. Your line is now open. Please go ahead.

Good morning everybody and thanks very much for taking my question. First of all, I definitely appreciate the thoughts for the tragedy that happened in D.C. Along those lines, I would love to hear your guys' view on sort of the adequacy of infrastructure, and traffic control capability in your key markets. Do you see sort of room for improvements there? Or you're pretty happy with how the infrastructure set up? Thank you.

Hi, Stephen, I mean, this industry in South America in the last 20 years has grown incredibly. I mean it was a very mature industry in the beginning of the century. Now, still immature in the sense that, we can still carry much more passengers as our figures are relatively low, as compared to developed markets. So - and I think that in every in every area of the chain of aircraft, transportation, cargo and passengers. We've seen improvement in the last few years. I mean airports have grown. ATC systems have improved. Today, we have GPS-guided landings and takeoffs in almost every significant airport. It works relatively well. We have much less congestion, particularly in ATC than what you have in the U.S. We don't have the complexity of the system of so many regional airports, small aircraft, jets, private jets. Air Force bases that you have in the U.S. So it's clearly less complex in our view than what you have there. Having said that, yes, of course, infrastructure has challenges. We're expecting to see the new Lima airport, which hopefully will open in the next two or three months, that's very needed. The concession program in Brazil, about new airports, I think has helped infrastructure as well. We have a new terminal in Santiago that is only three years old. I would say probably the airport where there's more constraint today is El Dorado in Bogota, where really slots are taking at every single hour of the day. And it's a little bit of a constraint in certain places. But I think that the programs of infrastructure, sometimes a little bit slower than what would love have a company growth of the industry, in the last 15 or 20 years. We actually are doing something very interesting. We are looking at our data, but not data where we have our parameters probably out of our ranges, much of the country where we have our parameters within our ranges, and that is helping us understand if there's things that can be done to improve safety for operations and the regional together. And actually, that's been very helpful. Because we have identified opportunities that we have passed to airports, and operators in terms of how to improve, the way they manage the infrastructure and the operations. At this point in time, we're, I think, leading that in the region, and being happy to not only help our own operation, but share this with the authorities so that the whole operation in the region is safer. So I wouldn't say that this is an - I mean it's important, of course, but it's not in the level of complexity that you have in the U.S. or EUROCONTROL, for example, has in Europe as well.

That's very helpful color. Really appreciate that. And as a very quick follow-up, when we think about the joint business agreement with Delta Airlines, where would you guys say you are in terms of the extent to, which that opportunity continues to spool up? Are we still kind of early stages? Are we sort of mid-cycle in terms of the revenue contribution you expect from that? Thank you.

Thanks, Stephen. So I mean, in the - so the JV with Delta is just over two years old now. The increase in capacity that both airlines put in the first 18 months was significant. We grew around 30%. Our seat count between South America and the U.S. Delta also up-gauged in several markets. It launched now Rio as a seasonal route as well. I think that - I mean there's a ton of opportunity for growth and development there. But it's also a moment of maturing, I think, of the investments we have made in the last 18 to 24 months. I would say where our focus today is in customer satisfaction. We are working very hard in making sure that the connectivity between both metals work seamlessly. We still have, I think, things to improve in that sense as the systems, of course, are different. And that's where our short-term focus is. But we just started Ecuador in the scope of the JV late this year. So we see opportunity growing there, also opportunity in Colombia. And clearly, the combination of both networks has a ton of potential going forward. Very happy with the deal.

Thanks very much.

Thank you.

Thank you. Our next question comes from Guilherme Mendes of JPMorgan. Your line is now open. Please go ahead.

Thank you and good morning to all and welcome Ricardo, good luck on the new role. I have two questions. The first one is a follow-up on the capital allocation. Besides the dividends and the buybacks that we already discussed, on the release, you also mentioned strategic investments as a potential use of capital. What exactly are you guys thinking about this one? And second one is, Robert, you mentioned about the strong demand across different regions. But in terms of competition, do you see any excessive capacity in other regions that could pressure prices in the near term? Thank you.

Thank you, Guilherme, and congratulations on your new position, by the way. So capital allocation - so dividends and buyback are the two ways that we consider today among others, but the most important, and which we're considering eventually returning capital to shareholders. One of the things that we are being very mindful of, is to have the flexibility of growing eventually our portfolio are growing, within the scope that is important to us. And in that sense, I think that the financial strength we have allows us for the opportunity to take potential opportunities. Nothing to report at this point in time. If there's something, of course, we will let you know in due time. But we consider today the position we have built, as one that provides options to LATAM, options in terms of growing. Bringing fleet, options in looking at deals, options in returning capital to shareholders, and we will ponder all these options and make use of the capital in the way that it's more efficient, for both the company and the shareholders of the group. Sorry second question, competition. So clearly, I would say that still domestic Colombia, is a market that is of overcapacity. There's been very aggressive growth in the last 18 months, by other players there. And it will come, in my opinion, to some kind of equilibrium hasn't arrived yet. So we're looking at domestic Colombia. There's a little bit of also intensity and capacity between the U.S. and Brazil, mostly driven by a very big growth in capacity from American in the high season into Brazil, but it's seasonal. The rest, I would say that the capacity is relatively balanced in most of the markets. So no big concerns in terms of that equilibrium at this point in time. Also, we don't see today significant evidence of new entrants potentially in the markets where we operate.

Very clear. Thank you so much.

Thank you.

Thank you. [Operator Instructions] Our next question comes from Pablo Monsivais of Barclays. Your line is now open. Please go ahead.

Hi. Thank you for taking my question. Good morning, everyone. Just a quick question on the demand per segment in terms of corporate and leisure. I remember that you have said, probably from the last year and a half, that leisure has been very, very strong, and corporate is also recuperate fastly. But what are you seeing right now? And what should we expect in terms of your capacity allocation going forward for this trend? Thank you.

Thank you, Pablo. So I think that probably two calls ago, or something like that, I gave a little bit of a flavor there. We talked about that leisure demand was above 100% as compared to 2019 levels, and that corporate demand, at that time, was around 100% against 2019 levels. I think that we're seeing today is evolution of demand by segment, relatively similar in all segments. So we're not seeing any changes significant in the mix. We see good support on corporate demand across most of the traffic and also leisure. So no real changes in the mix at least over the last six months. What we have done, though, and we believe it's important for our corporate travels, is that today, we're focusing in three important things. One is on-time performance. We do understand that time, is the most important commodity that our customers have, and the most premium customers value it the most. We have brought Wi-Fi also to almost all of our narrow-body fleet. In the Pacific side of South America, we're the only airline that provides Wi-Fi. And of course, we have the largest FFP in the region with almost 50 million members. What we have seen actually growing faster in the last year, is the number of members in our frequent flyer program. So we believe that's an important addition to that. And in particular, in Brazil, I would say, because in Chile and Peru, our corporate traffic figures have always been healthy, have improved significantly as well in 2024. ABRACORP, which is the travel agents - the corporate travel agency in Brazil producer report, with respect to that, and we reached 40.8% revenue share in the corporate segment in Brazil in 2024. That's the highest level we've had since 2013.

If I may ask a follow-up on that. And probably, I know it's too early to reach to this conclusion, but after the Gol and Azul merge, would you expect that share from the corporate partners in Brazil, for you to be higher than what you already have? You see that perhaps direct impact of the competitive landscape?

Pablo, I think it's - as I said before, I think it's very early to speculate about that. What we have seen today is a non-binding MOU that has, again, very little detail. And I think that we need to see they're filing - their public filing. What mitigations they will propose. CADE needs to review. And this is a big transaction eventually, which will have a lot of details in by CADE. So I'd rather see how this develops. I don't think it's time to speculate what will happen, and we'll see how this evolves in the next few weeks and months.

Absolutely. Thank you very much.

Thank you. At this time, we currently have no further questions, so I'll hand back to Andres for any further remarks.

Thank you very much, all, for joining us today. As always, our Investor Relations team is available for any further questions, and have a good day, everyone.

Thank you, all, for joining today's call. You may now disconnect your lines.