LATAM Airlines has filed for bankruptcy protection under Chapter 11 in New York, United States, the company announced on early Tuesday morning.
The group’s holding, LATAM Airlines Group S.A., including its subsidiaries and affiliates in Chile, Ecuador, Colombia, Peru and the United States are including in the filing. Affiliates in Brazil, Argentina and Paraguay remain unaffected, according to the company’s current statement.
LATAM is now undertaking a ‘voluntary’ restructuring in an effort to handle its debt and reorganize the airline to survive the ongoing Coronavirus crisis. Airlines of the group continue to fly as far as the situation and regional health regulations allow, and all existing and new bookings will be honored. Some affiliates of LATAM, including its Colombia-based operations, are currently grounded due to Covid-19 lockdowns in the respective countries. This is unrelated to the airline’s financial situation.
The company was able to gain support for the reorganization move through Chapter 11 by some of its largest shareholders, including the Cueto and Amaro families, and Doha-based Qatar Airways. Both parties have agreed to provide US $900 million in financing. In September last year, Delta Air Lines from the United States announced that it would acquire a 20 percent stake in LATAM. The deal is still pending regulatory approval.
Furthermore, LATAM Group says it is in discussion with the governments of Brazil, Chile, Peru and Colombia regarding possible state-funded rescue financing.
LATAM is the largest airline company in Latin America, with most of its operations being located in Brazil and Chile. Brazil has recently become the second most-affected country by the Covid-19 pandemic worldwide, based on total confirmed case numbers.
Earlier this month, its largest competitor on the continent, Bogota-based Avianca Holdings, also filed for bankruptcy protection in the United States.
Jakob Wert is an aviation journalist from Germany. He built up the website IFN.news and is the Editor-In-Chief of International Flight Network.