Corporate Presentation Miami, FL February 25th, 2015 AGENDA - - PowerPoint PPT Presentation

Corporate Presentation

Miami, FL February 25th, 2015

• LATAM Airlines in figures
• Cargo Unit
• Business Update

AGENDA

We are one of the ten largest passenger and cargo airlines in the world. PAX: 135+ destinations in 22 countries Cargo: 144+ destinations in 27 countries

53 thousand

Employees

60,000,000

Passengers

1.2 million

Tons

13.3 billion

USD

$

The Company

LATAM is a leader in the South American airline space

2013 Percenteges by Region– Gross Revenues

Our Business Units

2013 Percentages by Region– Gross Revenues

OCEANIA 1%

Cargo Unit

Our Cargo Unit in Figures

2013 Percentages by Region– Gross Revenues

Revenue by Geographic Area 2013

U.S.A.

36%

LATIN AMERICA

39%

EUROPE 15% ASIA 7% REST OF THE WORLD

<1 %

CENTRAL AMERICA 2% OCEANIA 1%

Composition of Air Cargo Markets

Perishables Urgent Valuables Demand is extremely sensitive to route and direction (e.g. SCL-MIA ≠ MIA- SCL) General Cargo

Air Cargo in Latin America

26% 18% 15% 6% 5% 4% 25%

Flowers Fish Vegetables Industrial and Specialized Machinery Small Packages and Shipments Electrical Machinery Others

24.8% 14.2% 10.3% 5% 4% 41.8%

Industrial and Specialized Machinery Electrical Machinery Small Packages and Shipments Specialized Equipment Ferrous Products Others

Operational efficiencies must be obtained by managing unbalanced flows and seasonal fluctuations

Southbound Northbound

Source: Boeing World Air Cargo Forecast 2012 – 2013

~50% ~50%

% of revenue (post-merger)

Freighter Flights

FLEXIBILITY AND VERSATILITY Allows adjustment of supply levels STABILITY AND FREQUENCY Ensures a consistent service level

Passenger Flights

~80-85%

Business Model

LATAM Airlines became one of the largest cargo airlines in the world…

Post-merger

500 1000 1500 2000 2500 3000 3500 4000

AF-KLM Lufthansa Emirates Cathay Korean Cargolux LATAM Singapore ANA IAG China Air Air China China Eastem EVA China Southern Qantas JAL United-Cont AVCA THAI

Source:2013 Financial Statements of each company. Excludes integrated competitors such as FedEx, UPS, DHL, TNT.

Cargo Revenue (MUSD)

…providing significant revenue diversification for LATAM Airlines…

0% 20% 40% 60% 80% 100%

Cargolux Atlas China Air Eva Korean Cathay Singapore Emirates LATAM THAI AF-KLM Lufthansa ANA China Eastem Air China AVCA JAL China Southern Qantas IAG

% Carga % Otros

Number

9

Source:2013 Financial Statements of each company.

Cargo Others

…and a leading position in key markets…

USA - Latin America (RT). Market Share Europe - Latin America (RT). Market Share Domestic Brazil Market Share

~63% ~37% ~76% ~24% ~50% ~50%

Operations on cargo aircraft and in bellies of passenger aircraft. More than 60 destinations.

Europe Markets: EUR-VCP/GRU/CWB EUR-SCL/COL/LIM/UIO/BRA-EUR Source: Internal Estimations and Customs Reports. H1 2014 USA Markets: MIA-Brazil/SCL/LIM SCL/LIM/COL/UIO-MIA

LATAM Airlines Fleet

PASSENGER AIRCRAFT

312

FREIGHTERS

12

324 aircraft

Network

NETWORK

LATAM

Buenos Aires Miami Madrid Paris Frankfurt Quito Guayaquil Lima Santiago Bogota

International passenger and cargo destinations. International cargo only destinations. International cargo destinations in Brazil. More than 40 domestic desinations in Brazil.

135 9 9 40

Sao Paulo Rio de Janeiro London

Presence

GSA Domestic Markets

v

Regional Office Headquarters Cargo Affiliates

Regional Office SJU HKG ICN KUL MNL PVG TPE TPE SIN AMS MIL CDG FRA MIA MAD NRT KIX NGO YVR YUL YYZ ORD IAH ATL

Colombia

Business Update

LATAM Airlines Vision: be one of the three best airlines in the world.

• Product portfolio development
• Robust SLA’s
• Improved customer interactions

Enhanced client experience Network Optimization & Development Execution Excellence

• Leveraging belly capacity
• Disciplined capacity management
• Smart asset utilization (ie. Freighter supporting

belly)

• Lean & reliable operations
• Seamless connectivity

LATAM Cargo’s International Strategy is anchored in three main pillars

Market Overview 2014

Rational and disciplined approach towards freighter capacity 30% 70%

Belly Freighter

55% 45%

LAN LATAM

ATK distribution by business unit (LAN  LATAM)

• No additional orders
• Expiration of leases
• Leasing 3 B767F to other

carrier

Context

• Weak regional cargo markets
• Increased competition from regional

and international cargo carriers

LATAM Cargo

• Focus on optimizing belly capacity

Update on Capacity & Fleet

12 12 9 8 4 4 4 4 5 10 15 20

2012 2013 2014 2015

B777 B767

48.2 51.3 48.1 49.7 51.8 49.5 46.2 45.3

20 40 60 80 100 120

2015 2014 2013 2012

• Passenger bellies to remain key growth driver in 2015, freighter capacity to remain roughly flat
• 25% reduction in B767 fleet helps match supply and demand without major itinerary adjustments

Capacity Evolution 2012-2015 ATKs by type (2012 = 100) Freighter Fleet 2012-2015 Number of Aircraft

# Pax WB B777 B767

84 78 79 75

Freighter PAX

Market Outlook 2015

NAM-SA Flows EUR-SA SA-NAM SA-EUR % Growth YoY Drivers 2-4% 4-5% 1-3% 3-5%

• Recovery in imports to Brazil after

World Cup

• Expected growth in auto industry
• Increased cargo from Asia
• Steady growth of main commodities
• ffset by very weak seed season
• Growth led by COL and ECU exports

• Direct dedicated freighter ex

BSL supports pharma

• pperation
• Only direct freighter

alternative into GRU ex EUR

Introducing new freighter operation AMS/BSL –GRU- EZE-SCL

23

Opportunity

Build a setup that would enable us to offer a virtual online service from main Asian origins to Latin America

• Reliability
• Visibility & Traceability
• Service Recovery Protocol
• Flexible shipping units

Enhanced Cargo Transfer and Service Agreement

Asia Project (ECTSA)

Thank You

Miami, FL February 25th, 2015