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PROPERTY, PLANT AND EQUIPMENT

12 Months Ended

Dec. 31, 2021

Disclosure of property, plant and equipment [text block] [Abstract]

NOTE 17 - PROPERTY, PLANT AND EQUIPMENT

The composition by category of Property, plant and equipment is as follows:

	Gross Book Value				Accumulated depreciation						Net Book Value
	As of		As of		As of			As of			As of		As of
	December 31,		December 31,		December 31,			December 31,			December 31,		December 31,
	2021		2020		2021			2020			2021		2020
	ThUS$		ThUS$		ThUS$			ThUS$			ThUS$		ThUS$
a) Property, plant and equipment
Construction in progress (1)		473,797		377,961		-			-			473,797		377,961
Land		43,276		42,979		-			-			43,276		42,979
Buildings		121,972		123,836		(61,521	)		(58,629	)		60,451		65,207
Plant and equipment		11,024,722		12,983,173		(4,462,706	)		(5,292,429	)		6,562,016		7,690,744
Own aircraft (3) (4)		10,377,850		12,375,500		(4,237,585	)		(5,088,297	)		6,140,265		7,287,203
Other (2)		646,872		607,673		(225,121	)		(204,132	)		421,751		403,541
Machinery		25,764		27,402		(23,501	)		(23,986	)		2,263		3,416
Information technology equipment		146,986		147,754		(130,150	)		(132,923	)		16,836		14,831
Fixed installations and accessories		147,402		154,414		(108,661	)		(105,215	)		38,741		49,199
Motor vehicles		49,186		49,345		(44,423	)		(44,140	)		4,763		5,205
Leasehold improvements		248,733		201,828		(115,758	)		(127,420	)		132,975		74,408
Subtotal Properties, plant and equipment		12,281,838		14,108,692		(4,946,720	)		(5,784,742	)		7,335,118		8,323,950
b) Right of use
Aircraft (3)		5,211,153		5,369,519		(3,109,411	)		(3,031,477	)		2,101,742		2,338,042
Other assets		243,014		244,847		(190,007	)		(176,570	)		53,007		68,277
Subtotal Right of use		5,454,167		5,614,366		(3,299,418	)		(3,208,047	)		2,154,749		2,406,319
Total		17,736,005		19,723,058		(8,246,138	)		(8,992,789	)		9,489,867		10,730,269

(1)	As of December 31, 2021, includes advances paid to aircraft manufacturers for ThUS$ 377,590 (ThUS$ 360,387 as of December 31, 2020)

(2)	Consider mainly rotables and tools.

(3)

As of December 31, 2020, due to Chapter 11, 29 aircraft lease contract were rejected, 19 were presented as to Property, plant and equipment, (2 A350, 11 A321, 1 A320, 1 A320N and 4 B787) and 10 were presented as right of use assets, (1 A319, 7 A320 and 2 B767). As of December 31, 2021, due to Chapter 11, 13 aircraft lease contract were rejected, 4 were presented as to Property, plant and equipment, (4 A350) and 9 were presented as right of use assets, (2 A320 and 7 A350).

(4)	As of December 31, 2020, eleven B767 aircraft were classified as non-current assets or groups of assets for disposal as held for sale.

(a)	Movement in the different categories of Property, plant and equipment:

	Construction in progress			Land			Buildings net			Plant and equipment net			Information technology equipment net			Fixed installations & accessories net			Motor vehicles net			Leasehold improvements net			Property, Plant and equipment net
	ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$

Opening balance as of January 1, 2019		630,320			45,424			112,565			8,987,582			22,564			71,009			634			83,267			9,953,365

Additions		21,884			7,950			-			1,694,640			6,580			26			73			34,988			1,766,141
Disposals		-			(28	)		(47	)		(23,945	)		(13	)		(75	)		(11	)		-			(24,119	)
Retirements		(20	)		-			-			(64,838	)		(85	)		(77	)		-			(362	)		(65,382	)
Depreciation expenses		-			-			(5,768	)		(776,225	)		(8,574	)		(11,945	)		(94	)		(19,001	)		(821,607	)
Foreign exchange		(1,340	)		(1,103	)		(914	)		(24,615	)		(234	)		(2,007	)		(125	)		(432	)		(30,770	)
Other increases (decreases)		(278,255	)		(3,837	)		(30,974	)		(418,083	)		538			2,903			-			-			(727,708	)
Changes, total		(257,731	)		2,982			(37,703	)		386,934			(1,788	)		(11,175	)		(157	)		15,193			96,555
Closing balance as of December 31, 2019		372,589			48,406			74,862			9,374,516			20,776			59,834			477			98,460			10,049,920
Opening balance as of January 1, 2020		372,589			48,406			74,862			9,374,516			20,776			59,834			477			98,460			10,049,920
Additions		6,535			-			-			485,800			1,295			9			-			-			493,639
Disposals		-			-			-			(1,439	)		(112	)		(31	)		(4	)		-			(1,586	)
Rejection fleet (*)		-			-			-			(1,081,496	)		-			-			-			(82	)		(1,081,578	)
Retirements		(39	)		-			-			(107,912	)		(55	)		(3,250	)								(111,256	)
Depreciation expenses		-			-			(4,819	)		(682,102	)		(6,186	)		(9,037	)		(81	)		(16,542	)		(718,767	)
Foreign exchange		(2,601	)		(5,428	)		(4,836	)		(146,219	)		(1,543	)		(7,195	)		4			(2,587	)		(170,405	)
Other increases (decreases) (**)		1,477			1			-			(142,179	)		656			8,869			-			(4,841	)		(136,017	)
Changes, total		5,372			(5,427	)		(9,655	)		(1,675,547	)		(5,945	)		(10,635	)		(81	)		(24,052	)		(1,725,970	)
Closing balance as of December 31, 2020		377,961			42,979			65,207			7,698,969			14,831			49,199			396			74,408			8,323,950
Opening balance as of January 1, 2021		377,961			42,979			65,207			7,698,969			14,831			49,199			396			74,408			8,323,950
Additions		84,392			1,550			92			563,023			6,455			6			17			6,543			662,078
Disposals		-			-			-			(169	)		(26	)		(309	)		(17	)		-			(521	)
Rejection fleet (*)		-			-			-			(469,878	)		-			-			-			(46,816	)		(516,694	)
Retirements		(279	)		-			-			(44,684	)		(212	)		(1,885	)		-			(26	)		(47,086	)
Depreciation expenses		-			-			(4,074	)		(620,349	)		(4,345	)		(8,304	)		(61	)		(11,649	)		(648,782	)
Foreign exchange		(1,720	)		(1,252	)		(833	)		(19,199	)		(404	)		(1,752	)		(11	)		(13,074	)		(38,245	)
Other increases (decreases) (**)		13,443			-			59			(538,996	)		537			1,786			1			123,589			(399,581	)
Changes, total		95,836			298			(4,756	)		(1,130,252	)		2,005			(10,458	)		(71	)		58,567			(988,831	)
Closing balance as of December 31, 2021		473,797			43,277			60,451			6,568,717			16,836			38,741			325			132,975			7,335,119

(*)	Include aircraft lease rejection due to Chapter 11.

(**)

As of December 31, 2021, it includes the lease contract amendment of two B787 aircraft ThUS$ (397,569) and six A320N aircraft ThUS$ (284,952). Include the reclassification of 4 A350 aircraft that were incorporated on property plant and equipment from available for sale for ThUS$ 464.812 and the reclassification of 11 B767 aircraft that were moved to available for sales for ThUS$(606,522) (see note 13).

(b)	Right of use assets:

							Net right
							of use
	Aircraft			Others			assets
	ThUS $			ThUS $			ThUS $

Opening balances as of January 1, 2019		2,456,333			92,111			2,548,444
Additions		732,489			20,675			753,164
Depreciation expense		(377,911	)		(22,473	)		(400,384	)
Cumulative translate adjustment		(2,046	)		(2,515	)		(4,561	)
Other increases (decreases)		(40,325	)		13,360			(26,965	)
Total changes		312,207			9,047			321,254
Final balances as of December 31, 2019		2,768,540			101,158			2,869,698
Opening balances as of January 1, 2020		2,768,540			101,158			2,869,698
Additions		-			399			399
Fleet rejection (*)		(9,090	)		-			(9,090	)
Depreciation expense		(395,936	)		(22,492	)		(418,428	)
Cumulative translate adjustment		(6,578	)		(11,173	)		(17,751	)
Other increases (decreases) **		(18,894	)		385			(18,509	)

Total changes		(430,498	)		(32,881	)		(463,379	)
Final balances as of December 31, 2020		2,338,042			68,277			2,406,319
Opening balances as of January 1, 2021		2,338,042			68,277			2,406,319
Additions		537,995			1,406			539,401
Fleet rejection (*)		(573,047	)		(4,577	)		(577,624	)
Depreciation expense		(317,616	)		(16,597	)		(334,213	)
Cumulative translate adjustment		(574	)		(1,933	)		(2,507	)
Other increases (decreases) **		116,942			6,431			123,373
Total changes		(236,300	)		(15,270	)		(251,570	)
Final balances as of December 31, 2021		2,101,742			53,007			2,154,749

(*)	Include aircraft lease rejection due to Chapter 11.

(**)	Include the amendment of 109 aircraft lease contract (1 A319, 37 A320, 12 A320N, 19 A321, 1 B767, 6 B777 and 16 B787).

(c)	Composition of the fleet

				Aircraft included						Aircraft included
				in Property,						as Rights				Total
				plant and equipment						of use assets				fleet
				As of			As of			As of		As of		As of			As of
				December 31,			December 31,			December 31,		December 31,		December 31,			December 31,
Aircraft	Model			2021			2020			2021		2020		2021			2020

Boeing 767		300	ER		16			17			-		-		16			17
Boeing 767		300	F		12	(1)		11	(1)		1		1		13	(1)		12	(1)
Boeing 777		300	ER		4			4			6		6		10			10
Boeing 787		800			4			6			6		4		10			10
Boeing 787		900			2			2			15		10		17			12
Airbus A319		100			37			37			7		7		44			44
Airbus A320		200			94			96	(2)		39		38		133			134	(2)
Airbus A320		NEO			-			6			12		6		12			12
Airbus A321		200			18			19			31		19		49			38
Airbus A350		900			-			4			-		7		-			11
Total					187			202			117		98		304			300

(1)	One aircraft leased to Aerotransportes Mas de Carga S.A. de C.V.

(2)	Two aircraft leased to Sundair.

(d)	Method used for the depreciation of Property, plant and equipment:

		Useful life (years)
	Method	minimum	maximum

Buildings	Straight line without residual value	20	50
Plant and equipment	Straight line with residual value of 20% in the short-haul fleet and 36% in the long-haul fleet. (*)	5	30
Information technology equipment	Straight line without residual value	5	10
Fixed installations and accessories	Straight line without residual value	10	10
Motor vehicle	Straight line without residual value	10	10
Leasehold improvements	Straight line without residual value	5	8
Assets for rights of use	Straight line without residual value	1	25

(*)	Except in the case of the Boeing 767 300ER and Boeing 767 300F fleets that consider a lower residual value, due to the extension of their useful life to 22 and 30 years respectively. Additionally, certain technical components are depreciated based on cycles and hours flown.

(e)	Additional information regarding Property, plant and equipment:

(i)	Property, plant and equipment pledged as guarantee:

Description of Property, plant and equipment pledged as guarantee:

				As of				As of
				December 31,				December 31,
				2021				2020
Guarantee	Creditor	Committed		Existing		Book		Existing		Book
agent (1)	company	Assets	Fleet	Debt		Value		Debt		Value
				ThUS$		ThUS$		ThUS$		ThUS$

Wilmington Trust Company	MUFG	Aircraft and engines	Airbus A319		58,611		259,036		69,375		268,746
			Airbus A320		51,543		227,604		63,581		257,613
			Boeing 767		46,779		168,315		43,628		180,591
			Boeing 777		144,358		141,620		-		-
			Boeing 787		-		-		114,936		119,229

Credit Agricole	Credit Agricole	Aircraft and engines	Airbus A319		1,073		6,419		1,073		6,936
			Airbus A320		139,192		117,130		139,192		122,251
			Airbus A321 / A350		30,733		27,427		30,733		28,127
			Boeing 767		10,404		30,958		10,404		32,802
			Boeing 787		91,797		38,551		91,797		43,020

Bank Of Utah	BNP Paribas	Aircraft and engines	Airbus A320 / A350		198,475		233,501		262,420		289,946
			Boeing 787		-		-		211,849		246,349
	Investec	Aircraft and engines	Airbus A320 / A350		-		-		37,870		-
	SMBC	Aircraft and engines	Airbus A350		-		-		130,000		134,780

Natixis	Natixis	Aircraft and engines	Airbus A321		-		-		271,129		375,645

Citibank N.A.	Citibank N.A.	Aircraft and engines	Airbus A319		27,936		45,849		27,936		38,836
			Airbus A320		128,030		181,224		128,030		214,597
			Airbus A321		41,599		75,092		41,599		81,706
			Airbus A350		15,960		26,507		15,960		26,823
			Airbus B767		90,846		181,246		90,846		197,797
			Airbus B787		23,156		17,036		23,156		19,047
			Rotables		162,477		134,846		162,477		145,708

UMB Bank	MUFG	Aircraft and engines	Airbus A320		166,712		258,875		167,371		246,293

MUFG Bank	MUFG Bank	Aircraft and engines	Airbus A320		-		-		215,043		295,036

Total direct guarantee					1,429,681		2,171,236		2,350,405		3,371,878

(1)	For the syndicated loans, is the Guarantee Agent that represent different creditors.

The amounts of the current debt are presented at their nominal value. The net book value corresponds to the assets granted as collateral.

Additionally, there are indirect guarantees associated with assets registered in properties, plants and equipment whose total debt as of December 31, 2021, amounts to ThUS$ 1,200,382 (ThUS$ 1,642,779 as of December 31, 2020). The book value of the assets with indirect guarantees as of December 31, 2021, amounts to ThUS$ 2,884,563 (ThUS$ 3,496,397 as of December 31, 2020).

As of December 31, 2020, given Chapter 11, nineteen aircraft corresponding to Property, plant and equipment were rejected, of which eighteen had direct guarantees and one indirect guarantee.

As of December 31, 2021, the Company keeps valid letters of credit related to assets by right of use according to the following detail:

Value

Release

Creditor Guarantee

Debtor

Type

ThUS$

date

GE Capital Aviation Services Ltd.

Latam Airlines Group S.A.

Three letters of credit

12,198

Jan 20, 2022

Merlin Aviation Leasing (Ireland) 18 Limited

Tam Linhas Aéreas S.A.

Two letters of credit

3,852

Mar 15, 2022

RB Comercial Properties 49 Empreendimentos Imobiliarios LTDA

Tam Linhas Aéreas S.A.

One letter of credit

25,835

Apr 29, 2022

41,885

(ii) Commitments and others

Fully depreciated assets and commitments for future purchases are as follows:

	As of		As of
	December 31,		December 31,
	2021		2020
	ThUS$		ThUS$

Gross book value of fully depreciated property, plant and equipment still in use		223,608		206,497
Commitments for the acquisition of aircraft (*)		10,800,000		7,500,000

(*)	According to the manufacturer’s price list.

Purchase commitment of aircraft

	Year of delivery
Manufacturer	2022-2028		Total

Airbus S.A.S.		70		70
A320-NEO Family		70		70
The Boeing Company		2		2
Boeing 787-9		2		2
Total		72		72

As of December 31, 2021, as a result of the different aircraft purchase contracts signed with Airbus SAS, 70 Airbus A320 family aircraft remain to be received with deliveries between 2020 and 2028. The approximate amount, according to the manufacturer’s list prices, is ThUS $ 10,200,000.

As of December 31, 2021, as a result of the different aircraft purchase contracts signed with The Boeing Company, 2 Boeing 787 Dreamliner aircraft remain to be received with delivery dates between 2022. The approximate amount, according to list prices from the manufacturer, is ThUS $ 600,000.

(iii) Capitalized interest costs with respect to Property, plant and equipment.

		For the year ended
		December 31,
		2021		2020		2019
Average rate of capitalization of capitalized interest costs	%		5.06		3.52		4.72
Costs of capitalized interest	ThUS$		7,345		11,627		1,444