Hello, everyone. Thank you for joining us, and welcome to the third quarter 2026 LATAM Airlines Group earnings conference call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. Before I turn the call over to management, I would 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, 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 that are discussed in detail in the published Form 20-F 2026 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. If there are any members of the press on the call, please note that for the media, this is a listen-only call. I will now hand the conference over to Ricardo Bottas, CFO. Mr. Bottas, please go ahead.
Hello, and good morning. Welcome to our third quarter 2026 conference call, and thank you all for joining us today. I am Ricardo Bottas, Group CFO, and here with me are Roberto Alvo, our CEO, and Andrés del Valle, Corporate Finance Director. I will hand it over to Roberto to share his opening remarks.
Good morning, and thank you, Ricardo. The third quarter 2026 was another strong demonstration of LATAM Group's ability to deliver solid financial results, even in such challenging operation environment. Total revenues increased by 18.4% year-over-year, supported by disciplined capacity management and a 9.4% increase in passenger unit revenues, demonstrating LATAM Group's ability to retain high profitability on the back of good commercial execution, growing customer preference, and consistent cost control. During the quarter, LATAM Group continued to improve the customer experience, with NPS reaching 55 points, one point above the same period last year. This continued focus on customers, together with a robust network and the loyalty program, allowed the premium revenue growth to outpace total revenue growth by five points. Costs remained under control, reflecting the group's continued focus on efficiency.
CASK ex-fuel variations as compared to last year are explained almost completely by exchange rate variations, particularly the appreciation of the Brazilian real. During the quarter, jet fuel prices remained elevated, which represented an additional cost impact for the group of approximately $520 million. Despite its impact, LATAM continued delivering profitable results, posting double-digit adjusted operating margins again. On the financial side, LATAM's consistent progress was also recognized by S&P Global Ratings and Fitch Ratings, with both agencies upgrading LATAM's credit rating to BB+, which has allowed us to meet our financial policy aspiration. Both upgrades occur in the middle of this volatile environment, providing further evidence of LATAM Group's robust business model and its ability to remain profitable across different market conditions. As we continue to navigate these volatile times, we remain focused on strengthening the business for the future.
During the month of October, LATAM Airlines received its first two Embraer E195-E2 aircraft, with operations expected to begin in the Brazilian domestic market on November 30th. This represents an important milestone in our fleet strategy, providing greater flexibility to deploy the right aircraft across the network and further improve operational efficiency. As the end of the year approaches and the environment remains highly dynamic, LATAM continues to take a prudent approach. Although demand remains strong and fuel cost pass-through remains high, jet fuel prices have continued to increase, and we do not expect a meaningful relief in the short term.
Reflecting this reality, LATAM has updated its full-year 2026 guidance on the back of our jet fuel price assumption, which adds over $900 million of cost in the fourth quarter alone, as compared to the same period in 2025, and will add over $2 billion for the full year. Despite the significant headwind, the group expects to generate at least $1.2 billion of adjusted levered free cash flow and maintain a double-digit adjusted operating margin for the year. This represents a particularly meaningful outcome. It reflects not only LATAM Group's ability to navigate external challenges, but also the structural progress achieved over the past years, reinforcing the group's confidence in its ability to continue executing its strategy, supported by its people, commercial capabilities, and financial strength. With that said, I'll hand it over to Ricardo to walk us through the specifics of LATAM's third quarter performance. Thank you.
Thank you, Roberto. Turning to slide four, LATAM's third quarter performance provides clear evidence of LATAM Group's effective commercial execution in a high fuel price environment. Total revenues grew 18.4% year-over-year to $4.6 billion, with a strong demand across all segments in both the Passenger and Cargo businesses. Passenger revenues reached $4 billion in the quarter, up 17.8% year-over-year, driven by a 7.7% capacity expansion and supported by a 9.4% expansion in passenger RASK, reaching $0.083. Yield expansion was 11.7%, and the group holds a healthy passenger load factor at 83.7%. On the cost side, despite facing an additional $594 million total fuel cost increase year-over-year, mainly due to a 52% surge in average jet fuel prices, non-fuel unit costs remain in containment, with passenger CASK ex-fuel increasing only 3.5%, reflecting continued cost discipline.
Against this backdrop, LATAM delivered another adjusted EBITDA of close to $1.1 billion, with a margin of 24%. On its part, adjusted operating income stood at $573 million, with a margin of 12.5%. With all that, LATAM achieved a net income of $441 million, with a bottom line margin of 9.6%. Net income this quarter was 16% higher than last year. It is important to note that the interest expenses line was lower year-over-year, as 3Q 2025 included $105 million in one-time costs related to the liability management exercise performed during that quarter. Let us now take a look on the commercial performance behind these results on the next slide number five. During this quarter, LATAM Group demonstrated its ability to balance capacity, growth, pricing, and load factors, supported by disciplined revenue management and continued customers' preference. The performance was broad-based across the network.
The international segment led capacity and unit revenue growth, with passenger RASK increasing 10.2% year-over-year, while both LATAM Airlines Brazil domestic market and Spanish-speaking domestic affiliate markets delivered solid increase of close to 9%. At the same time, load factors remaining healthy across all markets. Domestic load factors declined by 3 percentage points, but remained around 83%, while the international load factor reached 84.3%, only 0.8 percentage points below last year. Moving to the next slide number six. The quality and diversification of LATAM's revenue base remains central to its business model. Highlighting customer preference for LATAM Group's differentiated product, premium cabin revenues grew 23% year-over-year, outpacing main cabin revenues. This less elastic premium demand provides a structural buffer against broader consumer price sensitivity.
LATAM Cargo revenues grew 20% year-over-year to $483 million, benefiting from shorter sales cycles that allow immediate fuel cost pass-through. Meanwhile, LATAM Pass, the loyalty program, reached 57 million members, up 9% year-over-year, generating 2/3 of the total passenger revenues and anchoring customer loyalty across the region. Turning to slide seven. This bridge shows how the commercial performance translated into financial results. Higher passenger and cargo unit revenues, together with the appreciation of local currencies, offset nearly 80% of the quarter additional $520 million fuel price impact by generating $410 million in incremental revenues year-over-year. Capacity growth, cost containment initiatives, and efficiency improvements also contribute to earnings. As a result, LATAM delivered nearly to $1.1 billion in adjusted EBITDA, broadly in line with the same quarter last year, even with these substantially higher fuel costs and continued expansions in our operations.
Moving to the next slide number eight. As I have mentioned on the previous slide, one of LATAM Group's key priorities continue to be maintaining a competitive cost structure, supported by disciplined capacity management, operational efficiencies, and the continued digitalization of the business. During this quarter, passenger CASK ex-fuel increased only 3.5% year-over-year, despite inflation, depreciation of local currency, and higher revenue-related costs. In fact, excluding the impact of local currency appreciation, the increase would have been virtually flat, showcasing LATAM's ability to effectively manage the cost components within its control. Next slide number nine. LATAM continues generating solid cash flow while executing its investment plan.
During this quarter, the group generating close to $900 million in operating cash flow and continued to execute its investment plan, with a combined focus on growth and maintenance, with a CapEx in Q3 of $432 million, which includes fleet renewal, net of financing through new aircraft acquisitions, cabin retrofits, and the installation of Wi-Fi on wide-body aircraft. It also includes the development and enhancements of VIP lounge in Guarulhos, São Paulo, and also the expansion of the VIP lounge in Miami in the United States, as well as a robust agenda of investments in maintenance and technology. All in all, LATAM generated over $300 million in cash during this quarter prior to capital allocation initiatives. During this period, the group has repurchased 0.65% of the company's share capital under the shareholder-approved program. Turning to slide 10.
LATAM continues to maintain a strong balance sheet, closing the quarter with a liquidity and adjusted net leverage in solid positions, both absolutely and also relative to the financial policy framework, which provides for the maintenance of liquidity levels between 21% and 25% of last 12-month revenues and a net leverage below 2x. This financial strength provides flexibility to continue investing in the business and pursuing growth opportunities while maintaining a disciplined approach to capital allocation. On slide 11, both S&P, as Roberto mentioned, and Fitch Ratings upgraded LATAM to BB+, bringing the group just one notch below investment grade. Importantly, LATAM's bonds are now rated investment grade by both agencies at BBB-. These upgrades represent an important milestone in LATAM's financial trajectory, particularly considering the challenging environment experienced throughout 2026.
Looking ahead, LATAM remains focused on optimizing its capital structure, reducing its cost of debt, and proactively managing its debt maturity profile while maintaining the financial discipline. Follow me on slide 12 for an important update. Let me conclude with LATAM's updated guidance for the full year of 2026. This revised outlook reflects a more challenging fuel price environment for the fourth quarter than previously anticipated. As Roberto highlighted earlier, LATAM expected to face over $2 billion in additional fuel costs this year compared to 2025, solely from higher jet fuel prices. Despite this significant impact, LATAM expects to deliver adjusted EBITDA between $3.9 billion and $4.1 billion, close to the same $4.1 billion achieved last year.
Even more importantly, LATAM expects to generate at least $1.2 billion in levered free cash flow during 2026, demonstrating its ability to sustain substantial cash generation despite the current jet fuel price environment. Last slide number 13. I'd like just to take a moment to remind you that LATAM will be hosting its Investor Day in New York on December 14th, 2026, and we invite you also to tune in to the live webcast of that event. With that, we'll now open the line for your questions. Thank you very much.
We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Michael Linenberg with Deutsche Bank. Your line is now open. Please go ahead.
Oh, yeah. Hey, good morning, Roberto, Ricardo, Andrés. Congratulations on the rating upgrade, or upgrades, I should say, by the two agencies. Two questions here. One is, as we think about 2027, how should we think about your capacity growth? I realize it's early, but we were almost double digit this year. How should we also think about CapEx? Can you just remind us of your aircraft deliveries for 2027?
Sure, Michael. Good morning, and thanks for the congrats. Let me handle the capacity comments, and then Ricardo will take on the fleet side. As you know, we normally post guidance on the late part of the year for 2027. We haven't done so, but if I can give you a sense, LATAM has the capacity to grow in terms of fleet up to high single digits if we wanted to. The capacity we'll eventually end up flying will very much depend on fuel prices and what happens throughout the next few months.
We're going to be prudent in terms of deploying capacity, and as we have done in the past, we will only grow if we believe that there's profitable growth ahead of us. So, I don't have a number for you at this point in time. We'll release it towards the end of the year, but we can grow up to high single digits if we use all of our fleet, and we'll probably grow a little bit less if fuel prices remain high. Ricardo, you want to take the fleet question?
Sure, Roberto, and hi, Michael. We disclosed, and I will provide you some figures in terms of the fleet plan and the position that we are expecting to have. By the end of this year, we are expecting to end with 409 aircraft. Next year, we expect to receive an additional 30 aircraft and end the 2027 year with a fleet of 426 aircraft, including the remaining 12 Embraers. We have these 24 Embraers that will arrive, half this Q4, and the remaining 12 during 2027.
Okay, great. Thanks for that. Just one quick follow-up. You are in a position where you financially can grow and take share and do it profitably. Are there any markets where, over the last 12 months or so, you have seen a greater share shift, you vis-à-vis your competition? Any color on just kind of the market and competitive backdrop would be great. Thanks. Thanks for taking my questions.
Yeah, sure, Michael. I think if you look at market share performance over the last 12 months, and probably the last 24 months, we have grown more significantly in domestic Brazil. Today, our capacity in domestic Brazil is around 40%-41% in total, and our corporate market share sits close to 50% in total. With what we see in the competition published capacity, we believe that we can sustain, eventually slightly improve that percentage. That I would say is the market where we have seen a little bit more of a shift.
The Pacific side has remained relatively constant. We have very high levels in all of the countries, mid-60s in Peru and Chile, close to 50% in Ecuador, and slightly above 25% in domestic Colombia. On international front, we have also gained some share, both in regional and in some long-haul markets, specifically South America to Brazil. Together with Delta, we hold, as we have in the last few years, the leadership position between South America and the U.S. Thank you.
Thank you.
Hi, Michael. I don't know if you're still online. Probably you have to mute your connection.
Yeah, yeah. No, I am. Thank you.
Okay. You are holding the connection. Thank you. Thank you, Michael.
Your next question comes from the line of Guilherme Mendes with JPMorgan. Your line is now open. Please go ahead.
Good morning, Roberto, Ricardo, and Andrés. Thanks for taking my question, and congrats on the results. My question is trying to reconcile the load factors with the yields and PRASK numbers that we saw in the quarter. Basically, lower load factors on a year-over-year basis, but increasing yields and PRASKs across the three regions. Just wondering if you're starting to see any signs of a price strategy reaching some kind of saturation in specific regions, or if the price increase strategy remains solid across the three regions. Thank you.
Thanks, Guilherme, and thanks for the congrats as well. I mean, as you have seen, RASK is growing close to 10%. Yields are growing a little bit beyond that. That's why load factor is a little bit lower. This we see as just a normal consequence of some of the elastic portion of the demand being not there for given the higher yields. But this is completely within our revenue management strategy, and we have no concerns with respect to that. Holding a slightly lower load factor on the back of optimizing the RASK is what we're seeking for in these particular circumstances, and that's fine. I think that the load factors decreases have been discrete, and this is again a testament of the fact that we're increasing our revenue share on the premium segment, which is much more inelastic.
Companies like LATAM, companies that focus on premium customer, will see a smaller loss of load factor vis-à-vis companies that cater for the more elastic segment, or eventually you will see slower RASK increases vis-à-vis what we have. We're very comfortable with the mix of yields and load factors that we're seeing today. Thank you.
Thanks, Roberto. If I may follow up, looking to 2027, I understand there's no guidance yet, but think about the pricing strategy and assuming lower fuel costs. Is it fair to assume the prices could remain pretty much where they are, meaning at elevated levels, even with lower jet fuel costs into 2027?
I wish I had the answer for that question, Guilherme. I don't know exactly what is going to happen in 2027. But what I can tell you, I think it's fair to say that capacity on an industrial level will remain somewhat constrained. We are seeing the issues of the airframers and engine manufacturers still affecting that. We are starting to hear people pushing aircraft to the right, whether redelivering aircraft or delaying orders. That will continue to keep the capacity side, in my mind, a little bit more constrained from an industry-wide perspective, and surely in the region we'll see some of those effects as well.
If the picture like that holds there and the economies are in good shape, demand doesn't vary significantly, I think it's relatively safe to say that prices will be able to remain at a higher level at least than what it was before this fuel crisis started. But I have no crystal ball. I just think that the balance of capacity and demand will allow for the pricing to stay above if prices were to go back to 2025 levels. But we'll see what happens in due time. Thank you.
Mm-hmm. That's helpful. Thank you, Roberto.
Your next question comes from the line of Gabriel Rezende with Itaú. Your line is now open. Please go ahead.
Hi, good morning. Just a few follow-ups here over the pricing strategy. It is very clear that the company is managing to pass through the higher fuel costs, and that we might see, even under a scenario that we see improvement in fuel costs, the company might maintain these yields higher for longer. I am just trying to understand how the company is managing the pricing, also taking into consideration the recent 10% depreciation in the BRL, assuming that about 40%, perhaps 50% of our revenues are coming from the Brazilian market. Just trying to understand whether the company has seen the necessity to further increase prices to incorporate this perhaps new level of the BRL versus the USD as well. Thank you.
Hi, Gabriel, and thanks for the question. Early days after the elections in Brazil and the somewhat higher level of the real, to give a complete picture on the situation there. What I can tell you is that few days after the election, we have seen demand stable and sales stable in local currency. No impact that we have seen that concerns us at this point in time. Of course, higher real poses lower yields in dollars, if you express it in dollars, but also we have the advantage of lower express costs in dollars because of our significant expense in Brazilian reais. At the end of the day, pricing is one tool, but what we try to optimize here is RASK, more than the yield itself. Okay? This is done through pricing strategies and capacity management.
What we are seeking here is to optimize that equation all the time. If demand remains strong as we have seen it, I think that the trends that we have seen will continue, and the pricing points will be elevated, and the pass-through will be still strong, probably at [$180], of course, hard to catch up to those higher fuel prices. But if the environment changes, then that will be prudent in terms of adjusting in capacity to trying to continue optimizing the RASK position that we have achieved. Thanks.
Roberto and Gabriel, if I may jump in, just to also take the opportunity from this question to clarify and also emphasize the assumptions that we are having from our guidance to have the BRL for Q4 at BRL 5.3, which represents an average for the full year of BRL 5.2.
Yes, that is very clear. Thanks for the addition, Ricardo. Thanks, Roberto. If I may, just a second question here. Are you seeing competitors in the Brazilian market behaving anything differently versus what we have seen in the first half of the year? Just trying to understand whether perhaps LATAM is seeing a larger room to increase tariffs versus its competitors, perhaps because of their exposure to more premium revenue, or perhaps around depreciation versus their peers as well. Thank you.
I think that what I can say is, yes, we have continued to improve our premium revenue vis-à-vis the whole of the revenue. That gives us more resilience on the revenue side. Not necessarily the strategy of our competitors is the same, or in our minds, have achieved the same results. We will see what the results are when they post them. But in our minds, what we have built over the years, trying to have a consistent product, creating loyalty out of the execution of that product, and the FFP has yielded its benefits.
We see them, they are in front of us, and we will continue to do exactly the same because we believe it is the right strategy. At this point in time, we feel very comfortable with the position that we have achieved in most of the markets where we operate, and this is the outcome of a strategy that seeks to make sure that people want to fly with us because they experience the best product there is in South America. Thank you.
Thank you. Very clear.
Your next question comes from the line of Lucas Marquiori with BTG Pactual. Your line is now open. Please go ahead.
Thanks. Hey, guys. Morning. Two questions on my side. First one, just wanted to hear your early thoughts on what's the current calculations you guys are having in terms of passing through the tax reform changes that we are having in Brazil early 2027, especially after the early release of the 11% CBS rate starting in January. I'm assuming this is a higher bar than what you guys were kind of forecasting before. What's the early calculations you guys have internally for price pass-through in early 2027 to try to compensate for that? Or at least if you guys have any call around the sector negotiations under ABEAR or under ANAC to kind of help at least have some relief on that one. Number two, if you guys could provide at least some updates on the network planning for this peak season.
I'm assuming that under these BRL level, under these oil pricing level, some routes become uneconomical. If you guys could provide at least what are the frequencies, what are the routes you guys have been adjusting for now at least, and if today is the scenario for you guys to start speeding up the retirement of some of your older aircraft, like the A319s or something like that, just to kind of give us an update on the network planning for next year. That's helpful, guys. Thanks.
Hi, Lucas. Let me try to unpack all of the questions that you posed in more or less orderly fashion. First, VAT. I think it's important to point out that VAT will affect differently different types of customers. Corporate customers actually will have the benefit of having tax credits from VAT system now that they don't have today. For corporations, actually, the cost can eventually decrease vis-à-vis of what they pay today, where not necessarily all the costs in Brazil are recoverable. In the case of individuals, yeah, VAT will be added to the ticket. It would not be the 11%, as you mentioned, because some of the other taxes will be taken out, but it's a net increase.
This will eventually look a little bit like what we have seen in terms of the higher fuel prices, and we will see how this goes into pass-through during next year. Having said that, there's still conversations between ABEAR is the Brazilian airline association, the domestic carriers, and the government related to the tariff levels, to the tax levels for 2027 and onwards. As you know, this has not been settled, not only for this industry, but for many industries. We're having these conversations actively with the government, explaining to them the potential impact that this can have with particularly individual passengers, and we'll see what the outcome of these conversations is. So that's probably that question. The other one you talked about fleet planning and routes.
I mean, you can see in the guidance that we were guiding a little bit higher capacity after our second quarter results. We lowered that about 0.5 percentage point for the year. This is the reaction basically to the higher fuel prices. LATAM has an advantage, which is when you have a large network, you can decrease frequencies without not necessarily canceling flights. Just to give you an example, we have 22 flights between Lima and Cusco a day. You take out one, the product is still great, 21, and that's 5% capacity reduction.
So what we're doing is managing our network in the best way that we can still provide an excellent product to our customers while at the same time trying to optimize the economic equation. So I would say that's probably the 2/3 of the question. The last one was a profitable fleet and so on. I think that Ricardo already gave you the figures, 409 aircraft at the end of the year, plus 30, it's 439, but we will end the year with 426. This implies the retirement of 13 aircraft, and those are older aircraft, basically A319s. Thank you.
Your next question comes from the line of Filipe Nielsen with Citi. Your line is now open. Please go ahead.
Hey. Hello, everyone. Thanks for taking my questions. I have one question regarding the hedging strategy. We saw that this quarter, you locked less hedges than regularly. We understand this from the high volatility of fuel and understand that this could be because hedges are expensive nowadays. Just wanted to get a sense from you how this changes the strategy and the expectations you have on earnings volatility related to fuel and related to your pricing strategy in the fourth quarter and ahead, and if we should see you guys getting back to the regular hedging level that you normally do if fuel goes down and volatility improves going forward. This is my first question, and then I'll be back for a follow-up.
Okay, Filipe, thank you for your question. Actually, you have answered part of the question. We are not planning to change our hedge policy, and we are using the same strategy. But considering the market conditions, we will continue to assess the market to understand the opportunities that we have under the same policy, to understand when we should understand the price makes sense in terms of premiums. As you know, we use this strategy to reduce the volatility. We hold the positions. As you could see also in the Q3, the calls that we have bought since the beginning of the conflict were in the money in the Q3, but makes no sense at this current level of price to have this kind of alternative protection.
We are looking on a day-by-day basis the market conditions, the premiums, but also the fuel price to understand when makes sense to come back to the normal. Yes, we are willing to, because that's the assumption from the policy that we have, to have inside the range, to have a relevant protection combined with the pass-through capacity. It's not the hedge strategy itself, it's the combination of the hedge and our pass-through perspective.
Great. Thank you. Just one follow-up regarding the Brazilian economic conditions. Just wanted to get a sense from you, how are you reconciling the possibility of economic deceleration in Brazil impacting your pricing pass-through. If you see, considering all the fleet discussions that we had here during the call, if you see further space for reducing capacity growth and continuing profitable in an economic slowdown. Thank you.
Thank you, Filipe. I think you pointed out in the last part of your question, part of the answer. At the end of the day, capacity management will do the work for adjusting to very diverse demand conditions. As I said earlier in the call, we have seen in the very few days after the election, the good sales levels in local currency in domestic Brazil. We will see how it plays out in the following week, but we have seen no impact that we can talk of in these eight days or so that have passed. The second part of your question also, I think it is important to remind you that when we think about capacity management, one of the things that we have done in the last few years is focus on having probably around 7% of our capacity on a high variable cost basis.
We do not look at fixed to variable cost on average as much as we look at the marginal capacity, and we want to have as high as possible variable cost mix for that, because this is the way we can quickly adjust in the short term. This is why we keep fully depreciated or close to fully depreciated aircraft, and this is why we have the structure we have in terms of making sure that we can decrease our size if necessary without a significant impact on overall economics due to this structure. This is what we have designed since the pandemic times, and this is what we will apply or are applying whenever we slow down capacity a little bit.
At this point in time, I just want to end this with, I would say, a positive note in the sense that LATAM has done a good job so far. The product is great, the delivery is good, demand is there. So despite the headwinds that we see in the environment, we like the position we are in. On a relative basis, clearly this is the strongest position in the region whatsoever. That is relevant for these volatile times we have today. Thank you.
Your next question comes from the line of Jens Spiess with Morgan Stanley. Your line is now open. Please go ahead.
Yes, hello. Thank you for taking my question, and also congrats on the results and navigating the challenging time. I just want to ask basically a hypothetical question, meaning that if oil were to remain at the, I don't know, like 4.4 or 4.3 jet fuel, I mean, what should we expect into next year? Obviously, you will probably try to raise fares a bit, reduce a bit capacity to protect load factors. I don't know, I just want to understand what could be the margin progression, assuming that fuel remains close to current levels. Should we get back to double-digit operating margins relatively quickly at the beginning of next year, or how are you thinking about it? Thank you.
Hi, Jens. Hypothetically answering.
Yes.
I mean, I think that the key at the end of the day is capacity. I think that the industry as a whole, worldwide, you will see many, many players significantly struggling if the prices that we are seeing today remain for, let's say, the totality of 2027. I think that we're already starting to see, on a worldwide basis, some of those things happening. The good thing about our position is that we have built a very strong balance sheet position and a good cost situation that allows us, in a way, to manage this better and observe and see if opportunities can be created and look at those opportunities in the light of our relative strength.
It's very hard for me to give you a sense of what would happen for the industry as a whole or for LATAM or for the region at [$180], but I think that what is very likely is that we will see significant disruption in a number of competitors, and that will probably change the capacity picture. But it's very, very, very hard to forecast that scenario.
I just want to end saying that we are on the strong side of that situation if this happens because of what we have built, and this is what we have done over the years, make sure that LATAM's model is resilient to crisis, which we see from time to time in the industry happening. I don't want to call this fuel situation a crisis for a second. I don't want to be pessimistic about it, but clearly gives us the sense that we can navigate as we have done in 2025, in 2026, I'm sorry, in a good way like we have shown so far. Thank you.
All right, perfect. Thank you.
There are no further questions at this time. I will now turn the call back to Ricardo Bottas for closing remarks.
Thank you all for joining us today and for your continued interest in LATAM. We look forward to see you, or many of you, at our Investor Day in New York on December 14th. Thank you again, and have a great day.
This concludes today's call. Thank you for attending. You may now disconnect.