LATAM Airlines Borrow Market Tightens to Year Extreme Before Q3 Print

Short interest in LATAM Airlines LTM has nearly tripled over the past month, reaching its highest level in at least a year, while the borrow market has effectively closed. Among Latin American carriers, that combination puts LTM well ahead of peers such as Copa Holdings and Azul on short-seller positioning; Copa's borrow conditions remain loose by comparison, and Azul's restructuring concerns draw a different kind of attention. LTM's estimated short interest has climbed to roughly 4.84 million shares, up 189% over 30 days and 36% in the past week alone.

The borrow market tells the more urgent story. Availability has collapsed to 2.1%, the tightest reading of the past year, meaning fewer than one share remains available for every 46 already lent out. As recently as late September, availability was above 100%. Cost to borrow has moved in tandem, tripling from below 0.9% in early October to 2.58% now, with the sharpest leg of that move coming in the past two weeks. The ORTEX short score has risen to 58.7 from 53.9 two weeks ago, placing borrow pressure in the 83rd percentile of the stock's own history. The stock has fallen 17% over the past month to $42.38, losing another 8.4% in the past week, which has only encouraged fresh positioning.

Options traders, by contrast, are not sending a defensive signal. The put/call ratio of 0.69 is essentially flat against its 20-day average of 0.69, with a z-score barely above zero. The 52-week PCR high is 6.09, so the current reading is near the low end of the range, suggesting the options market is not pricing unusual downside risk into the November 3 print.

The ownership register carries its own subplot. Two Schedule 13D filers remain on the activist register: Sixth Street Partners Management, which filed an amendment in February 2026 showing a 13.2% stake (down from 17.4%), and Strategic Value Partners, whose last amendment in September 2025 showed a 5.4% stake but no current holding is disclosed. Both are event-driven disclosures around the 5% threshold, and either holder may have moved without filing again. Delta Air Lines and Qatar Airways each hold roughly 10.5% of shares, making the ownership structure unusually concentrated for a listed airline, which limits the free float and amplifies the effect of the short interest build on borrow conditions.

Traffic data from ORTEX Alt Data provides operating colour without a measured link to the financials. ANAC's Brazil airlines series recorded the largest September for paid passengers since the dataset begins in 2024, at 3.83 million, and the largest September for departures at 25,208. The Peru MTC series posted the largest December 2025 for domestic passengers on record going back to 2005, at 904,830, up 10% year on year. Neither dataset has been tested as a leading indicator for LATAM's reported revenue, so these figures describe demand conditions rather than foreshadow the print.

The November 3 result will test whether the sharp share-price decline and the surge in short positioning reflect genuine deterioration in the company's post-restructuring earnings trajectory, or whether the borrow squeeze has amplified a move that the underlying financials do not support.