LATAM Airlines Group continues to evaluate funding options for just over half of its 2019 fleet commitments, after deferring the delivery of its first five Airbus A321neos.

The Santiago-based carrier needs financing for roughly $600 million of its $1.1 billion in commitments next year, said Andes del Valle, senior vice-president of corporate finance at LATAM, on 21 November. For that, it is evaluating "different options", he said without elaborating.

LATAM will take delivery of 11 Airbus A320neos, four Airbus A350-900s and two Boeing 787-9s in 2019, under a revised fleet plan released the same day. It deferred deliveries of its first five A321neos to 2020 and later.

The airline has financing in place for roughly $500 million of its commitments next year, says del Valle.

In September, del Valle said LATAM had sale-and-leaseback (SLB) financing in place for three of its 2019 deliveries: one A350 and both 787s.

The carrier financed the majority of its 2018 deliveries with SLBs. It has previously used a variety of structures to finance aircraft, including commercial bank loans, secured capital market debt, and Japanese operating leases with call options (JOLCOs).

JOLCOs are gaining popularity among Latin American carriers, as they allow an airline to finance 100% of an aircraft's capital costs. Avianca, Aeromexico and Copa Airlines used the structure in 2018, with the latter planning to finance all of its 2019 deliveries in the market.

Separately, cash and cash equivalents at LATAM increased less than 1% to $1.2 billion during the third quarter, a financial filing shows. Cash was down 20% year-on-year.

Liquidity stood at $1.8 billion, including the full $600 million available under the airline's revolving credit facility, at the end of September.

Long-term debt was flat at $6.12 billion during the third quarter. Debt was down 10.3% compared to September 2017.

LATAM did not take delivery of any aircraft in the third quarter, but expects three – two A320neos and one A350-900 – in the final quarter of 2018.

The airline's remaining 2018 deliveries are financed with "operating lease contracts", says del Valle.

Source: Cirium Dashboard