LATAM has filed for Chapter 11 Bankruptcy Reorgnization
LATAM is now the latest airline to file for bankruptcy. The airline group will restructure under Chapter 11 protection in the United States.
While restructuring, LATAM plans these initial actions:
- LATAM Airlines Group and its affiliates will continue to operate passenger and cargo flights, subject to demand and travel restrictions.
- All current and future tickets, travel vouchers and frequent flyer miles and benefits, as well as flexibility policies, will be honored.
- The group’s employees will continue to be paid and receive benefits as provided in their employment agreements.
These actions will allow LATAM to ensure long-term sustainability and continue flying.
This Chapter 11 Bankruptcy filing covers all LATAM subsidaries except for LATAM Argentina, Brazil and Paraguay.
Additionally, LATAM plans to return these aircraft to their lessors as part of restructuring:
- 1 Airbus A319
- 1 Airbus A320
- 11 Airbus A321s
- 2 A350-900s
- 4 Boeing 787-9s.
LATAM CEO Roberto Alvo:
LATAM entered the COVID-19 pandemic as a healthy and profitable airline group, yet exceptional circumstances have led to a collapse in global demand and has not only brought aviation to a virtual standstill, but it has also changed the industry for the foreseeable future. We have implemented a series of difficult measures to mitigate the impact of this unprecedented industry disruption, but ultimately this path represents the best option to lay the right foundation for the future of our airline group. We are looking ahead to a post-COVID-19 future and are focused on transforming our group to adapt to a new and evolving way of flying, with the health and safety of our passengers and employees being paramount.”
LATAM has an infographic explaining the process. Notably, they use the US3’s previous bankruptcies as examples of sucessful restructuring.
So far, LATAM has already secured $900 million in funding from its largest shareholders, the Cueto and Amaro families and Qatar Airways. LATAM has approximately $1.3 billion at hand.
If it isn’t clear, no, LATAM did not “bite the dust".
They will continue flying and hopefully re-emerge as a stronger carrier.