Key facts
- LATAM Brasil will reduce capacity by 3% in July due to fuel costs.
- Capacity reductions are expected to continue into the third quarter.
- Airline executives criticized engine makers for ongoing aircraft grounding and repair delays.
- Engine supply chain issues are expected to persist for several years.
- LATAM Airlines CEO Roberto Alvo warned of further capacity cuts if high fuel prices persist until 2027.
LATAM Brasil is set to reduce its capacity by 3% in July due to persistent high fuel costs, a move that extends reductions into the third quarter. This adjustment reflects broader industry concerns, with LATAM Airlines CEO Roberto Alvo warning that capacity cuts could continue until 2027 if fuel prices remain elevated. The airline industry is grappling with multiple challenges, including the impact of fuel costs and significant constraints in engine supply and repair.
During the International Air Transport Association's annual meeting, airline executives voiced strong dissatisfaction with engine manufacturers like RTX's Pratt & Whitney, Rolls-Royce, and GE Aerospace. LATAM Brasil CEO Jerome Cadier reported that 12 of its single-aisle planes are currently grounded due to engine issues. United Airlines CEO Scott Kirby anticipates engine supply to be the biggest constraint for at least the next five years. These engine problems are leading to higher maintenance costs and reduced aircraft durability, impacting airline growth plans and financial performance. While engine makers are investing to increase production and repair capacity, the overall supply chain strain is expected to persist for several more years.