Santiago, Chile, May 8, 2018 – LATAM Airlines Group S.A. (NYSE: LTM; IPSA: LTM), the leading airline group in Latin America, announced today its consolidated financial results for the first quarter ending March 31, 2018. “LATAM” or “the Company” makes reference to the consolidated entity, which includes passenger and cargo airlines in Latin America. All figures were prepared in accordance with International Financial Reporting Standards (IFRS) and are expressed in U.S. dollars. The Brazilian real / US dollar average exchange rate for the quarter was BRL 3.25 per USD.

HIGHLIGHTS

• Operating income amounted to US$228.5 million in the first quarter of 2018, 50.1% higher than the same period of 2017. Operating margin increased by 2.2 percentage points year-over-year in the quarter, reaching 8.4%, boosted by unit revenue and capacity increases across all passenger business units (international, Brazil domestic, and Spanish Speaking Countries domestic) as well as cargo.

• Net income totaled US$93.9 million in the quarter ended in March 2018, US$28.3 million higher than the same period of last year, despite of a foreign exchange gain almost US$35 million lower (US$0.8 million gain in 2018 against US$35.4 million gain in the same quarter of 2017). Moreover, LATAM further reduced its exposure to foreign exchange variations this quarter, which should help lessen bottom line volatility for the remainder of the year.

• Total revenues rose 10.2% year-over-year in the first quarter of 2018 to US$2,730.5 million, driven by higher traffic and yields across all passenger markets, resulting in a 7.0% year-over-year increase in passenger revenue per available seat kilometers (RASK), together with a 2.9% rise in available seat kilometers (ASK). Cargo unit revenue grew 11.0% year-over-year, boosted by a steady recovery of imports to the region. Available ton kilometers increased by 5.0% year-over-year, resulting in an increase of total cargo revenues of 16.6% compared to the first quarter of 2017.

• Total operating expenses rose 7.6% year-over-year in the quarter ended in March 2018, mainly due to a 20.6% increase in fuel costs in comparison with the same period of last year. However, costs per ASK excluding fuel increased by only 0.2%. It is worth highlighting that wages and benefits decreased by 2.0% year-over-year in the quarter, reflecting a leaner and more efficient organizational structure.

• Deleveraging remains one of the Company’s main priorities. Between December 2017 and the end of the first quarter, adjusted net debt was reduced by US$209.7 million since December 2017, thus reaching a leverage ratio – measured as Adjusted Net Debt/EBITDAR – of 4.3x. Furthermore, liquidity reached US$1.9 billion, including cash on hand and US$450 million of an undrawn revolving credit facility1 (RCF), equivalent to 18.4% of the last twelve month revenues.

• On May 4th, Moody’s upgraded the Company’s corporate credit rating to Ba3 (from B1), with a ‘stable’ outlook, as a result of the LATAM’s ongoing operating margin expansion, debt reduction, and consistent high liquidity levels. In addition, Fitch ratings reaffirmed LATAM’s corporate credit rating at B+ and upgraded its rating outlook to ‘positive’ (from ‘stable’); while S&P maintained the LATAM’s corporate credit rating at BB- with a ‘stable’ outlook.

• On April 10, 2018, 842 unionized cabin-crew members of Transporte Aereo S.A. –one of the affiliates of LATAM Airlines Group in Chile– went on a strike that affected LATAM’s domestic operations in Chile, as well as some regional flights from Chile to other countries in South America. The Company took all possible measures to mitigate the impact to its passengers, but was obliged to cancel or reprogram approximately 2,000 flights, impacting close to 400,000 passengers, as domestic operations in Chile were reduced by approximately 50%. Since April 26, 2018, Transporte Aereo S.A. gradually started to reestablish its flights, and since May 3, 2018, it is operating under normal conditions, as almost all these cabin-crew members have individually decided to resume their work. As a preliminary estimate, the impact on the Company’s operating result would amount to a loss of about US$25 million.

• Finally, at the Annual Shareholders Meeting held on April 26, 2018, LATAM’s shareholders approved a dividend distribution for a total of US$46.6 million, equivalent to 30% of 2017 earnings and 124.4% higher than the amount paid in 2017. Said dividend will be payable on Thursday May 17, 2018, to shareholders on record as of May 11, 2018.

MANAGEMENT COMMENTS ON THE FIRST QUARTER 2018

At LATAM, passengers are our main priority, so we are committed to offering a unique travel experience to meet their differing needs. As an example of this, we are seeing a good demand response to our business model for the domestic markets that we launched last year. Not only did we carry 3.6% more passengers this quarter compared to last year’s first quarter, but the highest growth came from the domestic Spanish Speaking Countries markets (+5.5%). In addition, we were able to increase our load factors in these markets by 1.5 percentage points to 83.6%.

We have also made progress regarding the migration of LATAM Airlines Brazil and LATAM Airlines Paraguay’s Passenger Service System (PSS) —the platform for reservation, inventory and check-in— from Amadeus to Sabre. We expect this system to be fully implemented by May of this year, resulting in a unified reservation platform across the entire airline group and therefore an improved service for our customers, as well as additional cost savings for the Company.

Given how important cost efficiencies are in order to be able to provide low fares, we highlight the cost containment of the quarter, which allowed us to increase our operating margin. In the context of increasing fuel prices and additional competition in our markets, the cost initiatives that the Company continues to develop will remain among our highest priorities.

LATAM Airlines Group continues to work in order to offer the best network, value and experience for its customers. In addition to the 30 new routes that the Company launched in 2017, during the first quarter 2018 LATAM inaugurated 11 new routes, including new destinations such as Rome and San José (Costa Rica). For the balance of the year, LATAM already announced new routes and destinations from Sao Paulo, including Boston, Las Vegas and Tel Aviv.

We have received one of the two Airbus A350 that were planned for this year, which will allow us to keep expanding our international network. In addition, since March 2018, LATAM is leasing five additional aircraft to support its international operations and sustain its growth plans, as seven Boeing 787 aircraft are currently on ground awaiting engine maintenance from Rolls Royce. We are working closely with Rolls Royce in order to reduce the impact for the Company and our passengers, taking all the necessary measures to normalize our operations as soon as possible.

MANAGEMENT DISCUSSION AND ANALYSIS OF FIRST QUARTER 2018 RESULTS

Total revenues in the first quarter 2018 totaled US$2,730.6 million, compared to US$2,477.5 million in the same period of 2017. This 10.2% increase was driven by a 10.1% and 16.6% growth in passenger and cargo revenue, respectively. Passenger and cargo revenues accounted for 84.9% and 10.8% of the total operating revenue of the quarter, respectively.

Passenger revenues increased 10.1% year-over-year in the first quarter as a result of a 7.0% increase in consolidated passenger unit revenue (RASK), while capacity rose 2.3% year-over-year. The passenger RASK increase was driven by a 6.2% yield growth, together with a load factor expansion of 0.6 p.p., thus reaching 85.3%. This yield growth was mainly driven by a strong pricing environment in the international long-haul routes from the SSC (to the US and Europe in particular), as well as a healthier demand in the Brazilian domestic market.

The domestic operations of LATAM Airlines group’s Spanish speaking country affiliates (SSC) –which include LATAM Airlines Chile, LATAM Airlines Peru, LATAM Airlines Argentina, LATAM Airlines Colombia and LATAM Airlines Ecuador– accounted for 19.2% of total passenger revenue in the quarter. Their consolidated capacity increased by 2.8% year-over-year, boosted by ASK increases across all markets with the exception of Argentina, as the Company allocated more backup airplanes in the latter in order to improve its service. Traffic measured in RPK rose 4.7%, while the consolidated load factor expanded by 1.5 p.p. to 83.6%. Revenues per ASK in USD increased 4.0% in the quarter, as a result of an overall healthier demand in the region.

In Brazil’s domestic passenger operation – which represented 25.7% of total passenger revenues in the quarter – LATAM Airlines Brazil increased its domestic capacity for the second consecutive quarter, by 1.9% year-over-year, strengthening its connectivity especially from our Guarulhos and Brasilia hubs. On the other hand, traffic measured in RPK increased by 2.1% in the same period, thus expanding load factor by 0.1 p.p. to 82.3%. As a result, Revenues per ASK increased by 8.7% year-over-year in local currency (and by 6.1% in USD).

International passenger operations, which accounted for 55.1% of total passenger revenues, increased their consolidated capacity by 3.4% year-over-year in the quarter. International traffic rose 4.0%, with passenger load factors expanding by 0.5 p.p. to 87.2%. Consolidated RASK rose 9.2%, boosted mainly by routes from the Spanish Speaking Countries both to the US and Europe. Capacity increased for the second consecutive quarter in the routes from Brazil to the US, while maintaining RASK levels, as a result of a higher demand in those routes. Notably, demand and RASK kept improving in the regional flights, while capacity adjustments boosted RASK in the routes from Brazil to Europe and the SSC to the US and Europe.

Cargo revenues increased 16.6% in the quarter, reaching US$295.8 million, driven by a 7.1% increase in cargo yields, mainly due to a better demand environment, increased revenue management and a higher fuel surcharge. On the other hand, cargo load factors reached 54.8%, an improvement of 1.9 percentage points compared to the first quarter 2017. Imports from North America and Europe to Brazil showed an improvement in terms of revenues per ATKs, driven by higher imports of electronics and capital goods. Export markets are showing a recovery year-over-year driven mainly by salmon exports from Chile.

As a result, cargo revenues per ATK improved by 11.0% in comparison to the same quarter of the previous year, consolidating and further improving the positive trend shown since the beginning of last year. While cargo capacity, measured in ATKs, rose 5.0% in the first quarter of 2018.

Other revenues totaled US$116.7 million in the first quarter of 2018, a 0.7% decrease compared to the same period of last year. This year-over-year decline is due to accounting changes (IFRS-15) carried out this quarter .

Total operating expenses in the first quarter amounted to US$2,502.0 million, a 7.6% increase compared to the same period of 2017. This increase is mainly explained by US$122.8 million of higher fuel expenses, resulting from a 20.1% increase in the average price per gallon (excluding hedge) compared to the first quarter of 2017. However, cost per ASK excluding fuel costs increased by only 0.2% in the same period, as a result of the costs contention initiatives implemented during 2017, together with capacity increasing 2.9% year-over-year in the quarter. Changes in operating expenses were mainly explained by:

• Wages and benefits decreased 2.0%, explained by the 4.3% decline in the average headcount during the quarter. This was partially offset by the annual increase in unit salaries, mainly due to inflation adjustments as well as the 8.2% appreciation of the Chilean peso.

• Fuel costs rose 20.6%, mainly as a result of the 20.1% increase in the average fuel price per gallon (excluding hedge) as compared to the first quarter of 2017. The latter was partially offset by fuel hedge gains recorded in the quarter which totaled US$6.5 million, compared to US$2.4 million fuel hedge gains for the same quarter of 2017. At the same time, the Company recognized a US$0.7 million gain related to foreign currency hedging contracts, compared to a US$2.9 million loss recognized in the same period of last year.

• Commissions to agents decreased 2.5% due to an adjustment and simplification of the fare structure in the cargo business.

• Depreciation and amortization decreased 0.3% due to fewer on-balance aircraft compared to the same period of 2017, as well as the positive impact of the 3.3% year-over-year depreciation of the Brazilian real in the quarter.

• Other rental and landing fees increased 11.5%, mainly due to higher passenger and cargo operation as well as an increase in aeronautical rates due to inflation.

• Passenger service expenses increased 7.3% driven by the 3.6% increase in the number of passengers transported during the quarter as well as higher costs related to passenger compensations.

• Aircraft rentals decreased 9.7%, as a result of the reduction of 15 aircraft in our fleet under operating leases, offsetting the increase in the unit cost of rent as the Company has more modern aircraft under operating leases.

• Maintenance expenses increased 19.3% as the Company recognized a reversal of a redelivery provision during the first quarter of 2017. Redelivery costs during first quarter 2018 amounted to US$5.4 million, in line with same period of last year.

Other operating expenses increased 9.2%, due to higher sales and distribution costs mainly related to the passenger reservation system as the Company is currently switching its Brazilian operation to Sabre.

Non-operating results

• Interest income decreased by US$10.7 million year-over-year to US$12.2 million in first quarter 2018, as a result of lower interest rates in Brazil.

• Interest expense decreased 10.0% to US$86.2 million in first quarter 2018, from US$95.8 million in the same period of 2017, mainly due to gross debt reduction of 9.3%.

• Under Other income (expense), the Company registered a US$0.2 million net loss, including a US$0.8 million in foreign exchange gain. This compares to the US$48.9 million net gain in other income (expense) in the first quarter of 2017, which included a foreign exchange gain of US$35.4 million.

Net income in the first quarter amounted to US$93.9 million, an increase of US$28.3 million compared to the same period of 2017, mainly explained by a US$76.3 million increase in operating income. The latter was partially offset by a US$50.3 million decrease in the non-operating result compared to the same period of 2017.

LIQUIDITY AND FINANCING

At the end of the first quarter 2018, LATAM reported US$1,470 million in cash and cash equivalents, including certain highly liquid investments accounted as other current financial assets. Furthermore, the Company ́s liquidity position was enhanced by US$450 million of an undrawn revolving credit facility2 (RCF) line, which remained at the same level compared to the previous quarter. Thus, LATAM’s liquidity position amounted to 18.4% of the last twelve months’ net revenue by March 31, 2018.

Fleet commitments for 2018 amount to US$714 million, with approximately US$255 million accounting for capital expenditures. For 2019, expected fleet commitments amount to US$1,213 million. The Company is constantly working on adjusting its fleet to the current demand environment, so it can optimize its utilization and thus maximize profitability.

Additionally, LATAM expects to invest approximately US$650 million in non-fleet CAPEX in 2018, which includes intangible assets, fleet and non-fleet maintenance, expenditures in spare engines and fleet components, as well as expenses related to the retrofit of the Boeing 767s and 777s cabins. This number also includes the current implementation of our new Passenger Service System, switching our Brazilian operation to Sabre, which we expect to conclude in May 2018.

By the end of the quarter, LATAM ́s adjusted net financial debt amounted to US$10.1 billion, a US$209.7 million reduction compared to the previous quarter, thus decreasing its leverage to 4.3x from 4.5x in December 2017. For the balance of 2018, the Company has roughly US$742 million in debt maturities.

Notably, in line with its on-going effort to reduce the exposure to foreign exchange variations, the Company further reduced TAM’s balance sheet mismatch between liabilities (denominated in USD) and assets (in BRL) to US$285 million, compared to US$805 million at the end of the fourth quarter 2017.

Regarding hedging, the main objective of LATAM Airlines Group Hedge Policy is to protect medium term liquidity risk from fuel price increases and BRL depreciation, while benefiting from fuel price reductions and BRL appreciation. Accordingly, the Company hedges a portion of its estimated fuel consumption and Brazilian real operating exposure.

LATAM FLEET PLAN

During the first quarter of 2018, LATAM took delivery of two Airbus A321 and returned one Boeing 767-300F. Moreover, the Company added one leased Airbus A330 to its fleet under a rental agreement with the Spanish airline Wamos Air, in order to mitigate the impact of fewer Boeing 787 aircraft available due to the extension of Rolls Royce’s engine maintenance program.

As of May 2018, LATAM had sold two Boeing 777-200F3 to Atlas Air, thus reducing its financial debt. As a result, our freighter fleet is now comprised by nine Boeing 767-300F.

For 2018, the Company has an order for 12 aircraft and it is also incorporating into its operation two Airbus A350 that were previously subleased to Qatar, one Airbus A320 previously classified as hold for sale, and one Boeing 767-300F which was subleased to a third party. LATAM also expects to convert one Boeing 767-300 from a passenger aircraft into a freighter and to return five aircraft during this period, therefore ending the year 2018 with an operating fleet of 318 aircraft.

For 2019, the Company expects the delivery of 14 new aircraft and to return eight. Additionally, it expects to convert two Boeing 767-300 from passenger aircraft into freighters, thus ending the year 2019 with an operating fleet of 324 aircraft.

In line with the above, fleet commitments for 2018 and 2019 amount to US$714 million and US$1,213 million, respectively.

GUIDANCE

LATAM maintains its preliminary guidance for 2018 announced on January 4, estimating an operating margin for the full year 2018 in the range of 7.5% to 9.5% and a capacity growth for 2018 between 5.0% and 7.0%.