LATAM Group ("LATAM") announced the expansion of its freighter fleet growth under which it now plans to add 10 Boeing 767-300 Boeing Converted Freighters over the next three years. This will bring the fleet size to up to 21 freighters by 2023. The first aircraft will be expected to begin operations in December 2021.

The Group's freighter fleet growth plan initially included four firm conversion orders with Boeing and another four conversion options. Two months after the initial announcement, LATAM has exercised the four options, eight planes, and the conversion of two additional Boeing 767-300ERs. This means that the freighter fleet will be comprised of up to 21 aircraft by the end of 2023. Upon completion of the plan the Group will have almost doubled its freighter capacity as well as reduced the average fleet age from 17 to 14 years.

"The decision to expand our fleet is based on the attractive growth opportunities available, recent efficiency improvements and flexibility that the Boeing 767F freighter offers. Thanks to these elements we believe we will grow profitably, even if facing conditions similar to those that we faced before the pandemic. This expansion will allow LATAM'ss cargo subsidiaries to continue responding to our customers's needs and supporting the region'ss economic growth through increased and improved connectivity", said Andrés Bianchi, LATAM Cargo CEO.

Growing from 11 to 21 freighter planes will enable the LATAM Group's cargo subsidiaries to expand and reinforce their capacity to, from and within South America, and positioning the Group as the main freighter operator group in the region. The first eight airplanes have been allocated to markets that are critical for key customer segments.

"In general terms, the majority of the plan focuses on improving connectivity between North and South America. In particular, capacity from Colombia and Ecuador will be strengthened to support the flower export industry. Additional flights to support Chilean salmon exports as well as import traffic into the country will also be reinforced. Capacity to and from Brazil will also go up as we add routes from North America and Europe, boosting both the export and import markets", said Kamal Hadad, LATAM Cargo's Network and Alliances Director.

Hadad added that the freighter fleet flexibility will help LATAM assess a range of options. "For example, the two additional conversions could be used to refresh the current fleet or to begin new growth projects. The Group still has time to make the relevant decisions," he concluded.

LATAM also announced that it will use some of the 767-300ERs that are awaiting conversion under a hybrid format to benefit customers in the short term. The seats will be completely removed from three planes for this purpose in order to have a payload of up to 46 tons per flight. Two of these planes are already operational. The third one is expected to be available in the second quarter of 2021.

Furthermore, LATAM is optimizing commonality across their fleet of 767-300 production and converted freighters to maximize capacity, including the ability to transport delicate goods.

The conversion plan will be implemented in two stages and could boost the cargo operators' s joint capacity by up to 80%. The first phase features four confirmed aircraft to be received after conversion between 2021 and 2022. The second phase consists of four additional conversion options for delivery between 2022 and 2023.

The addition of these aircraft would consolidate LATAM Group as the leading group of cargo operators in South America. It will allow the cargo affiliates to reinforce their operations from North America and Europe into South America, as well as expand operations in the flower markets of Ecuador and Colombia.

The decision to incorporate additional 767-300BCF was based on the operational flexibility of the aircraft and its levels of efficiency.

March 01, 2021.- LATAM Airlines Group ("LATAM") announced a significant expansion of its cargo operations with the conversion of up to eight Boeing 767-300ER aircraft into Boeing Converted Freighters ("BCF")in the next three years. This represents a freighter capacity growth of up to 80%. This plan seeks to increase the service options and leverage the synergies of operating a single type of aircraft.

The plan is divided in two gradual stages. The first phase is based on four confirmed conversion slots with Boeing with re-deliveries between 2021 and 2022. Upon completion of that phase, LATAM's cargo operators' fleet would reach a total of 15 Boeing 767-300ER freighters. The second phase includes four conversion options with Boeing that would allow aircraft to be added between 2022 and 2023. If all options are executed LATAM would operate a total of 19 767-300ER freighters.

"Despite the deep crisis the industry is enduring due to the pandemic, we maintain our commitment to support the region's exporters and importers by providing them with more and better options to carry their cargo to their destinations. As a result, growth plans have been accelerated with conversion of up to eight Boeing 767-300ERs in the next 30 months. This investment, together with the significant cost efficiencies that we have generated during the Chapter 11 process, puts us closer to achieving our aspiration of being the best alternative for cargo customers", said Roberto Alvo, CEO of LATAM Airlines Group.

Andrés Bianchi, LATAM Cargo's CEO, highlighted the advantages of the Boeing 767-300ER freighter. "Combining the passenger belly operations of LATAM Airlines Group with 15 to 19 Boeing 767-300ER freighters efficiently strengthens our customer value proposition. These conversions will enable the cargo affiliates to grow in key segments such the Colombian flower market or imports to Brazil. It also allows our affiliates to expand their network in domestic markets where e-commerce is rapidly generating an increase in air cargo traffic. Growing with Boeing 767-300BCFs is extremely efficient as it is the optimal aircraft for all these undertakings and we can take advantage of the benefit of operating a single fleet type.".