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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended
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Dec. 31, 2018
Summary Of Significant Accounting Policies |
Schedule of reconciliation of differences in Income tax system | In order to facilitate comparison, some minor reclassifications have been made to the consolidated financial statements for the previous year.
| (a) | Accounting pronouncements with implementation effective from January 1, 2018:
|  | Date of issue |  | Mandatory application: exercises started at from
(i) Rules and amendments |  |  |  |
IFRS 9: Financial instruments. |  | December 2009 |  | 01/01/2018
Amendment to IFRS 9: Financial instruments. |  | November 2013 |  | 01/01/2018
IFRS 15: Revenue from ordinary activities from contracts with customers. |  | May 2014 |  | 01/01/2018
Amendment to IFRS 15: Revenue from ordinary activities from contracts with customers. |  | April 2016 |  | 01/01/2018
Amendment to IFRS 2: Share-based payments |  | June 2016 |  | 01/01/2018
Amendment to IFRS 4: Insurance contract |  | September 2016 |  | 01/01/2018
Amendment to IAS 40: Investment property |  | December 2016 |  | 01/01/2018
(ii) Improvements |  |  |  |
Improvements to the International Financial Reporting Standards (cycle 2014-2016) IFRS 1: Adoption for the first time of international financial reporting standards and IAS 28 Investments in associates and joint ventures. |  | December 2016 |  | 01/01/2018
(iii) Interpretations |  |  |  |
IFRIC 22: Transactions in foreign currency and anticipated consideration |  | December 2016 |  | 01/01/2018
(b) Accounting pronouncements not yet in force for financial years beginning on January 1, 2018 and which has not been effected early adoption
(i) Rules and amendments |  | Date of issue |  | Mandatory application: exercises started at from
IFRS 16: Leases |  | January 2016 |  | January 1, 2019
Amendment to IFRS 9: Financial Instruments |  | October 2017 |  | January 1, 2019
Amendment to IAS 28: Investments in associates and joint ventures |  | October 2017 |  | January 1, 2019
IFRS 17: Insurance contracts |  | May 2017 |  | January 1, 2021
Amendment to IFRS 10: Consolidated financial statements and IAS 28 Investments in associates and joint ventures. |  | September 2014 |  | To be determined
Amendment to IAS 19: Benefits to employees |  | February 2018 |  | January 1, 2019
|  | Date of issue |  | Mandatory application: exercises started at from
Amendment to IFRS 3: Business combination |  | October 2018 |  | January 1, 2020
Amendment to IAS 1: Presentation of financial statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors |  | October 2018 |  | January 1, 2020
(ii) Improvements |  |  |  |
Improvements to International Financial Reporting Standards (cycle 2015-2017) IFRS 3: Business combination; IAS 12: Income tax; IFRS 11: Joint agreements and IAS 23 Costs for loans. |  | December 2017 |  | January 1, 2019
(iii) Interpretations |  |  |  |
IFRIC 23: Uncertain tax positions |  | June 2017 |  | January 1, 2019
Schedule of impacts of the adoption of IFRS | The impacts of the adoption of IFRS 9 Financial Instruments and IFRS 15 Revenue from ordinary contracts with customers are as follows: Consolidated statement of financial position (extract)
|  |  |  | As of |  |  | Adoption |  |  | As of |
|  |  |  | December 31, |  |  | effect |  |  | January 1 |
|  | Note |  | 2017 |  |  | IFRS 9 |  |  | IFRS 15 |  |  | 2018 |
|  |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |
Current assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other non-financial assets, current |  | 7 - 12 |  |  | 221,188 |  |  |  | - |  |  |  | 54,361 | (4) |  |  | 275,549 |
Trade debtors and other accounts receivable, current |  | 7 - 8 |  |  | 1,214,050 |  |  |  | (11,105 | )(1) |  |  | - |  |  |  | 1,202,945 |
Non-current assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deferred tax assets |  |  |  |  | 364,021 |  |  |  | 89 | (2) |  |  | 6,005 | (7) |  |  | 370,115 |
Current liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable commercial and other Debts to pay |  | 7 - 20 |  |  | 1,695,202 |  |  |  | - |  |  |  | (22,192 | )(5) |  |  | 1,673,010 |
Other non-financial liabilities, current |  | 22 |  |  | 2,823,963 |  |  |  | - |  |  |  | 77,640 | (6) |  |  | 2,901,603 |
Non-current liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deferred tax liability |  | 18 |  |  | 949,697 |  |  |  | (1,021 | )(2) |  |  | 4,472 | (5) |  |  | 953,148 |
Equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accumulated earnings |  | 25 |  |  | 475,118 |  |  |  | (9,995 | )(3) |  |  | 446 | (8) |  |  | 465,569 |
- Effects of adopting IFRS 9
| (1) | Expected credit losses: The Company modified the calculation of the impairment provision to comply with the expected credit loss model, established in IFRS 9 Financial Instruments, which replaces the current loss impairment model incurred. To the calculate porcentage of credit losses, a risk matrix was used, grouping the portfolio, according to similar characteristics of risk and maturity. This change resulted in the recognition of an increase in the provision for impairment losses of US $ (11.1) million.
(2) Deferred tax adjustments originated by the application of IFRS 9. (3) Net effect on accumulated results of the adjustments indicated above. (4) Contract costs: The Company has capitalized the costs related to the revenues from air transport of passengers, corresponding to: the commissions charged by the credit card administrators for US$ 22.0 million and the air ticket booking services through the system general distribution (GDS) for US$ 15.6 million. Additionally, there is a reclassification of commissions from travel agencies for US$ 16.8 million, which previously were presented, according IAS 18, net of the liability to fly in other non-financial liabilities. (5) Contract liabilities: The Company has adjusted certain concepts that were recorded as obligations with suppliers and customers, which must now be treated as contract liabilities; therefore they must be deferred until the benefit of the service have been rendered. These concepts are mainly related to the ground transportation service for US $ 15.6 million and traveler's checks for US $ 6.6 million. (6) Performance Obligations: The Company analyzed the moment in which the performance obligations identified in the contracts with customers must be recognized in the consolidated result. During this analysis, some concepts were identified which must be deferred until the moment of service provision, mainly related to land transportation services, charges for modifications to the initial contract in the sale of tickets and redeem of some products associated with loyalty programs for US$ 60.8 million. Additionally, there is the reclassification detailed in numeral (4) for US$ 16.8 million. (7) Deferred tax adjustments originated by the application of IFRS 15. (8) Net effect on accumulated results of the adjustments indicated above.
Schedule of impairment losses provision | As of January 1, 2018, the calculation of the impairment losses provision are as follows:
|  | Portfolio maturity |
|  |  |  |  |  |  |  | Up to |  |  | Up to |  |  | More than |  |  |  |
|  |  |  |  | Up to |  |  | 91 to |  |  | 181 to |  |  | 360 |  |  |  |
|  | Up to date |  |  | 90 days |  |  | 180 days |  |  | 360 days |  |  | days |  |  | Total |
|  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |
Expected loss rate |  |  | 1 | % |  |  | 21 | % |  |  | 46 | % |  |  | 67 | % |  |  | 94 | % |  |  | 8 | %
Gross book value |  |  | 1,046,909 |  |  |  | 36,241 |  |  |  | 12,001 |  |  |  | 14,623 |  |  |  | 66,022 |  |  |  | 1,175,796 |
Impairment provision |  |  | (13,570 | ) |  |  | (7,774 | ) |  |  | (5,499 | ) |  |  | (9,803 | ) |  |  | (61,787 | ) |  |  | (98,433 | )
Schedule of analyzed business models and classified financial assets and liabilities | The Company analyzed the business models and classified its financial assets and liabilities according to the following:
|  | Classification IAS 39 |  |  | Classification IFRS 9 |  |  |  |
|  | Loans |  |  | Hedge |  |  | Held |  |  | Initial as fair value |  |  |  |  |  | At fair value |  |  |  |
|  | and |  |  | and |  |  | for |  |  | through profit |  |  | Cost |  |  | with changes |  |  |  |
Assets |  | receivables |  |  | derivatives |  |  | traiding |  |  | and loss |  |  | amortized |  |  | in results |  |  | Total |
|  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |
Balance as of December 31, 2017 |  |  | 2,446,864 |  |  |  | 62,867 |  |  |  | 1,915 |  |  |  | 501,890 |  |  |  | - |  |  |  | - |  |  |  | 3,013,536 |
Cash and cash equivalents |  |  | (1,112,346 | ) |  |  | - |  |  |  | - |  |  |  | (29,658 | ) |  |  | 1,112,346 |  |  |  | 29,658 |  |  |  | - |
Other financial assets, current |  |  | (23,918 | ) |  |  | - |  |  |  | (1,421 | ) |  |  | (472,232 | ) |  |  | 23,918 |  |  |  | 473,653 |  |  |  | - |
Trade debtors and other accounts receivable, current |  |  | (1,214,050 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,214,050 |  |  |  | - |  |  |  | - |
Accounts receivable from entities related, current |  |  | (2,582 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,582 |  |  |  | - |  |  |  | - |
Other financial assets, non-current |  |  | (87,077 | ) |  |  | - |  |  |  | (494 | ) |  |  | - |  |  |  | 87,077 |  |  |  | 494 |  |  |  | - |
Accounts receivable, non-current |  |  | (6,891 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 6,891 |  |  |  | - |  |  |  | - |
Balance as of January 1, 2018 |  |  | - |  |  |  | 62,867 |  |  |  | - |  |  |  | - |  |  |  | 2,446,864 |  |  |  | 503,805 |  |  |  | 3,013,536 |
|  | Classification IAS 39 |  |  | Classification IFRS 9 |  |  |  |
|  | Others |  |  | Held |  |  |  |  |  |  |
|  | financial |  |  | hedge |  |  | Cost |  |  |  |
Liabilities |  | liabilities |  |  | derivatives |  |  | amortized |  |  | Total |
|  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |
Balance as of December 31, 2017 |  |  | 10,086,434 |  |  |  | 14,817 |  |  |  | - |  |  |  | 10,101,251 |
Other current financial liabilities |  |  | (1,288,749 | ) |  |  | - |  |  |  | 1,288,749 |  |  |  | - |
Trade accounts payable and other accounts payable, current |  |  | (1,695,202 | ) |  |  | - |  |  |  | 1,695,202 |  |  |  | - |
Accounts payable to related entities, current |  |  | (760 | ) |  |  | - |  |  |  | 760 |  |  |  | - |
Other financial liabilities, not current |  |  | (6,602,891 | ) |  |  | - |  |  |  | 6,602,891 |  |  |  | - |
Accounts payable, not current |  |  | (498,832 | ) |  |  | - |  |  |  | 498,832 |  |  |  | - |
Balance as of January 1, 2018 |  |  | - |  |  |  | 14,817 |  |  |  | 10,086,434 |  |  |  | 10,101,251 |
Schedule of effects of changes recognized in the application of IFRS | The effects of the changes recognized in the application of IFRS 15 in the year 2018 in the consolidated income statement are presented below:
|  |  |  | For the year ended December 31, 2018 |
Reconciliation Revenue |  |  |  |  |  |  | Adjustments for reconciliation |  |  |  |
|  |  |  | Results |  |  |  |  |  | Deferred |  |  |  |  |  | Results |
|  |  |  | under |  |  | Contract |  |  | revenues |  |  |  |  |  | under |
|  | Note |  | IFRS 15 |  |  | costs (4) |  |  | recognition [(5), (6)] |  |  | Reclassifications |  |  | IAS 18 |
|  |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |
Revenue |  | 26 |  |  | 9,895,456 |  |  |  | - |  |  |  | 48,561 |  |  |  | 31,501 |  |  |  | 9,975,518 |
Cost of sales |  |  |  |  | (7,962,843 | ) |  |  | - |  |  |  | (34,986 | ) |  |  | - |  |  |  | (7,997,829 | )
Gross margin |  |  |  |  | 1,932,613 |  |  |  | - |  |  |  | 13,575 |  |  |  | 31,501 |  |  |  | 1,977,689 |
Other income |  | 28 |  |  | 472,758 |  |  |  | - |  |  |  | - |  |  |  | 42,563 |  |  |  | 515,321 |
Distribution costs |  |  |  |  | (619,200 | ) |  |  | (43 | ) |  |  | - |  |  |  | (20,003 | ) |  |  | (639,246 | )
Administrative expenses |  |  |  |  | (721,270 | ) |  |  | (806 | ) |  |  | - |  |  |  | (54,061 | ) |  |  | (776,137 | )
Other expenses |  |  |  |  | (359,781 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (359,781 | )
Other gains/(losses) |  |  |  |  | 53,499 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 53,499 |
Income from operation activities |  |  |  |  | 758,619 |  |  |  | (849 | ) |  |  | 13,575 |  |  |  | - |  |  |  | 771,345 |
Financial income |  |  |  |  | 53,253 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 53,253 |
Financial costs |  | 27 |  |  | (356,269 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (356,269 | )
Foreign exchange gains/(losses) |  | 29 |  |  | (157,708 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (157,708 | )
Result of indexation units |  |  |  |  | (865 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (865 | )
Income (loss) before taxes |  |  |  |  | 297,030 |  |  |  | (849 | ) |  |  | 13,575 |  |  |  | - |  |  |  | 309,756 |
Income (loss) tax expense / benefit |  | 18 |  |  | (88,456 | ) |  |  | (23 | ) |  |  | (1,030 | ) |  |  | - |  |  |  | (89,509 | )
NET INCOME (LOSS) FOR THE PERIOD |  |  |  |  | 208,574 |  |  |  | (872 | ) |  |  | 12,545 |  |  |  | - |  |  |  | 220,247 |
Income (loss) attributable to owners of the parent |  |  |  |  | 176,822 |  |  |  | (872 | ) |  |  | 12,545 |  |  |  | - |  |  |  | 188,495 |
Income (loss) attributable to non-controlling interest |  | 14 |  |  | 31,752 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 31,752 |
Net income (loss) for the year |  |  |  |  | 208,574 |  |  |  | (872 | ) |  |  | 12,545 |  |  |  | - |  |  |  | 220,247 |
(4) Contract costs: The Company has capitalized the costs related to the revenues from air transport of passengers, corresponding to: the commissions charged by the credit card administrators for US$ 22.0 million and the air ticket booking services through the system general distribution (GDS) for US$ 15.6 million. Additionally, there is a reclassification of commissions from travel agencies for US$ 16.8 million, which previously were presented, according IAS 18, net of the liability to fly in other non-financial liabilities. (5) Contract liabilities: The Company has adjusted certain concepts that were recorded as obligations with suppliers and customers, which must now be treated as contract liabilities; therefore they must be deferred until the benefit of the service have been rendered. These concepts are mainly related to the ground transportation service for US $ 15.6 million and traveler's checks for US $ 6.6 million. (6) Performance Obligations: The Company analyzed the moment in which the performance obligations identified in the contracts with customers must be recognized in the consolidated result. During this analysis, some concepts were identified which must be deferred until the moment of service provision, mainly related to land transportation services, charges for modifications to the initial contract in the sale of tickets and redeem of some products associated with loyalty programs for US$ 60.8 million. Additionally, there is the reclassification detailed in numeral (4) for US$ 16.8 million.

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