LATAM Airlines Group has successfully secured a $505 million sustainability-linked senior secured A/B term loan. This financing is specifically earmarked for the acquisition of 11 next-generation aircraft, which include one Airbus A320neo, four Airbus A321neos, and six Embraer E195-E2 aircraft. This move supports the airline's aggressive fleet renewal program, aiming to enhance capacity and operational efficiency. The financing covers deliveries planned for the second half of 2026.
Approximately $400 million of the transaction is sustainability-linked, meaning that the loan terms are tied to LATAM's greenhouse gas emissions reduction targets. This structure aligns the airline's aircraft investment with its long-term environmental objectives, and its environmental performance can influence the economic conditions of a portion of the financing. This marks the first time LATAM has used such a sustainability-linked financing structure for its Embraer fleet. The airline targets a 6% reduction in emissions intensity by 2030 compared to 2019, with a broader goal of achieving net-zero emissions by 2050.
BNP Paribas acted as the Sole Structuring Agent, Lead Arranger, and Sustainability Coordinator, arranging the 12-year Series A facility. Jackson Square Aviation (JSA) provided the Series B tranche, completing this A/B term loan partnership. The new aircraft are expected to contribute significantly to fuel efficiency, with the Airbus A320neo family offering at least a 20% reduction in fuel burn and CO2 emissions per seat, and the Embraer E195-E2 providing about 25% better fuel efficiency per seat compared to earlier E-Jets.
LATAM's Corporate Finance Director, Andrés del Valle, stated that this transaction diversifies the airline's funding sources and supports fleet renewal and growth. The 11 aircraft are part of a larger expansion plan, with LATAM expecting to add over 40 aircraft in 2026, bringing its total fleet to more than 410 aircraft by year-end. The airline anticipates adding up to 130 aircraft by 2030, with more than half of its fleet comprising next-generation models.
