LATAM Credit Rating Rises to BB+ as S&P Rewards Its Fuel-Shock Resilience
Chile · Aviation
Key Facts
- —What happened S&P Global Ratings raised LATAM Airlines Group from BB to BB+ on Monday, 21 September 2026, with a stable outlook.
- —Why it matters BB+ is the highest speculative grade, one notch below the BBB- level that S&P treats as investment grade.
- —What S&P rewarded Strong first-half results despite fuel prices about 80% higher than a year earlier, passed on through fares.
- —What S&P expects Adjusted EBITDA of about US$4.3 billion in 2026 and free operating cash flow near US$1.3 billion, per S&P.
- —The catch Debt will rise by US$3.5 billion to US$4 billion through 2028 as LATAM adds a net 69 aircraft, S&P projects.
- —How far it has come LATAM left US Chapter 11 bankruptcy protection on 3 November 2022 and returned to the New York Stock Exchange in July 2024.
South America’s largest airline group is now one notch below investment grade at S&P, less than four years after leaving bankruptcy protection.
The LATAM credit rating has moved to the doorstep of investment grade. S&P Global Ratings, one of the three big rating agencies, raised LATAM Airlines Group to BB+ on Monday, 21 September 2026.
The previous rating was BB, and the outlook is stable. BB+ is the highest rung of speculative grade, one notch below BBB-, where S&P’s investment-grade scale begins.
LATAM, based in Santiago, is South America’s largest airline group. It runs passenger airlines in Brazil, Chile, Colombia, Ecuador and Peru, plus a cargo business.
Why S&P moved now
S&P pointed to “strong performance in the first half of 2026 despite significant market volatility,” according to Investing.com’s account of the report. The volatility was mostly the price of jet fuel.
Fuel prices in the first half ran about 80% above a year earlier, S&P noted. LATAM passed much of that on to travellers, lifting passenger revenue by 27.9% in the second quarter.
Revenue per available seat kilometre, the income earned from each seat flown one kilometre, rose 17.5%. S&P read that as evidence of a resilient business model and a competitive cost base, Times Brasil reported.
The agency had signalled the move. In December 2025 it raised its outlook on LATAM from stable to positive, according to Investing.com Brasil.
At the time, S&P said an upgrade could follow within 12 to 18 months. The conditions were funds from operations above 45% of debt and EBITDA margins comfortably above 20%.
The numbers behind the upgrade
S&P expects LATAM to earn adjusted EBITDA of about US$4.3 billion in 2026. EBITDA is earnings before interest, taxes, depreciation and amortisation, a common gauge of cash profit.
The agency also projects free operating cash flow of about US$1.3 billion this year and US$1.9 billion in 2027. It forecasts funds from operations near 50% of debt through 2028.
S&P expects capacity to grow 9% to 10% in 2026, with planes about 84% full. Its EBITDA estimate falls inside LATAM’s own guidance range.
In its second-quarter report of 4 August 2026, LATAM raised its 2026 adjusted EBITDA guidance. The new range is US$4.1 billion to US$4.4 billion, up from US$3.8 billion to US$4.2 billion.
Second-quarter revenue rose 27.6% to US$4.18 billion. Net income fell to US$125 million from US$242 million a year earlier, as fuel costs bit.
“Second quarter results clearly demonstrate the group’s structural strength,” said Ricardo Bottas, LATAM’s chief financial officer, in the results statement. Total liquidity stood at US$4.23 billion at the end of June.
Live Company IntelligenceLATAM Credit Rating Rises to BB+ as S&P Rewards Its Fuel-Shock Resilience — the full investor dossier
LATAM Airlines Group S.A., together with its subsidiaries, provides passenger and cargo air transportation services in Chile, Argentina, Peru, Colombia, Ecuador, Brazil, the United States, other Latin American countries, the Caribbean, Europe, and Oceania. As of December 31, 2024, the company provides passenger transport services to…
Net income rose to $1.5 bn in 2025, from $581.8 mn in 2023.
A bigger fleet, and more debt
The upgrade comes as LATAM spends heavily on aircraft. S&P projects a net addition of 69 Airbus, Boeing and Embraer jets through 2028.
That will push gross debt up by US$3.5 billion to US$4 billion between 2025 and 2028, S&P estimates. It still expects adjusted debt to stay near 1.5 to 1.6 times EBITDA.
Part of the growth is in Brazil, LATAM’s largest domestic market. There it has firm commitments for 24 Embraer E2 regional jets through 2027.
Those jets and eight new routes will lift LATAM’s Brazilian network from 63 to 67 destinations, S&P noted.
S&P kept the rating on LATAM’s secured notes due 2030 and 2031 at BBB-. That rating already sits in investment-grade territory, because bondholders are backed by collateral.
What could go wrong
Brazil is also where S&P sees the most pressure. LATAM’s domestic load factor there fell 1.9 percentage points to 80.7% in the second quarter.
Rival Gol grew capacity 11.7% in the 12 months to July, S&P noted, as summarised by the Brazilian trade outlet Panrotas. Azul, the third big Brazilian carrier, has trimmed its network, Aviacionline reported.
S&P could lower the LATAM credit rating if funds from operations fell persistently below 45% of debt, Times Brasil reported. Weaker margins or thinner liquidity could also trigger a cut.
From bankruptcy to near investment grade
The upgrade caps a long recovery. LATAM filed for Chapter 11 bankruptcy protection in New York in May 2020, as the pandemic grounded its fleet.
It emerged on 3 November 2022 with about US$3.6 billion less debt, according to FlightGlobal. Its shares were delisted from the New York Stock Exchange in June 2020.
They returned on 25 July 2024 under the ticker LTM, after existing shareholders sold US$456 million of American depositary shares. LATAM received none of the proceeds.
For travellers and investors, a stronger LATAM credit rating mainly means cheaper borrowing for new planes. One more notch at S&P would put the whole company in investment grade.
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Frequently Asked Questions
What rating did S&P give LATAM?
S&P Global Ratings raised LATAM Airlines Group’s issuer rating from BB to BB+ on 21 September 2026, with a stable outlook. It kept the rating on LATAM’s secured notes due 2030 and 2031 at BBB-.
Is LATAM now investment grade?
Not at S&P. BB+ is the highest speculative-grade rating, one notch below BBB-, where the agency’s investment-grade scale starts. Only the secured notes, which are backed by collateral, carry an investment-grade rating.
Why did S&P raise the rating?
The agency cited strong first-half 2026 results despite jet fuel prices about 80% higher than a year earlier. LATAM raised fares enough to protect cash generation, and S&P expects adjusted EBITDA of about US$4.3 billion in 2026.
Where does LATAM operate?
LATAM Airlines Group is based in Santiago, Chile, and is listed in Santiago and New York. It runs passenger airlines in Brazil, Chile, Colombia, Ecuador and Peru, plus a cargo business, and had 383 aircraft at the end of June 2026.
Sources: Investing.com on the S&P upgrade, Times Brasil (CNBC) on the rating and its triggers, Panrotas on the stable outlook and Brazil competition, Aviacionline on the fleet plan, Investing.com Brasil on the December 2025 positive outlook, LATAM’s second-quarter 2026 results filed with the SEC, LATAM on its 2024 New York relisting, FlightGlobal on the Chapter 11 exit
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