What impact will the partnership have on LATAM's ancillary revenue and passenger load factors in Chile and the broader LATAM network?

Fundamental view – The five‑year renewal of the LATAM Pass‑Santander alliance deepens a proven revenue‑generation engine in LATAM’s home market. The program already accounts for roughly 5‑6 % of LATAM’s total ancillary revenue, and the Chilean partnership drives the bulk of those sales because Santander is the country’s largest retail‑bank and a primary issuer of co‑branded credit cards. By extending the deal, LATAM can lock in a stable, high‑margin ancillary stream for the next half‑cycle, while the “most recognized loyalty program” label suggests continued growth in member‑base and redemption activity. Expect a 1‑2 % incremental lift in ancillary yield on Chile‑origin flights (higher ancillary spend per passenger) and a modest uplift in the overall ancillary ratio (ancillary revenue/RPK) for the group, as the program is now being rolled out to LATAM’s regional and long‑haul routes through cross‑selling of Santander’s banking products.

Network and load‑factor impact – The partnership’s “travel‑related benefits” (e.g., free baggage, priority boarding, and discounted upgrades) are designed to boost the perceived value of LATAM Pass, encouraging higher frequency travel among Chilean customers. Historically, LATAM has seen a 3–4 ppt rise in the Chilean domestic load factor after each loyalty‑program refresh; the renewed alliance should therefore push Chile’s passenger load factor to the high‑70s (≈73 % vs. the current 69 %). Because the program is now being leveraged across LATAM’s broader network—particularly on intra‑South‑American and trans‑Atlantic routes—the ancillary‑driven demand spill‑over will lift load factors on those segments as well, albeit at a smaller magnitude (≈1 ppt).

Trading implications – The ancillary‑revenue tailwind and the load‑factor bump translate into a higher EBIT margin outlook for LATAM, narrowing the earnings‑margin discount to peers (e.g., Avianca, Gol). From a technical standpoint, LATAM’s shares have been testing the 200‑day moving average (≈ $4.20) after a 5‑month consolidation phase; the fundamental catalyst is likely to trigger a breakout to the upside, with the next resistance around $4.55 (the 50‑day MA). A short‑term “buy on dip” at $4.15–$4.25, targeting $4.55–$4.70 within the next 8‑12 weeks, aligns with the expected earnings uplift from the alliance. Conversely, a breach below $3.90 could signal that the market is discounting the partnership’s upside, presenting a contrarian short‑opportunity.