“We have implemented a series of difficult measures to mitigate the impact of this unprecedented industry disruption”.
In a press release, the Chilean airline LATAM, which is Latin America’s largest air carrier, has sought bankruptcy court protection in New York, USA.
The company has been burning through cash as most of the world’s fleet has been grounded due to the pandemic. Its cargo side of the business is vital for Chilean export markets which are driven by salmon.
Bloomberg reported that Latam listed assets of more than USD 21 billion and total liabilities of almost USD 18 billion in its bankruptcy petition. The Santiago-based airline is partly owned by Qatar Airways (20 per cent) and Delta Airlines (20 per cent). The Cueto family investment group own 21.5 per cent.
As of the filing, the group had approximately USD 1.3 billion in cash on hand.
Corporations file Chapter 11 if they need time to restructure their debts, and it allows many to remain in business. Cueto Group and Qatar Airways has committed USD 900 million in additional financing.
“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,” said Roberto Alvo, Chief Executive Officer of LATAM.
“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 Cargo Chile, has been included in the financial reorganisation process as well as LATAM’s affiliates in Chile, Peru, Colombia, Ecuador. It wrote that cargo operations will continue to fly with no impact.
The carrier is vital for export markets which are driven by Chilean salmon to the United States. Last week, it began multiplying cargo capacity between Santiago and Miami by five, going from 6 to 31 weekly frequencies in order to cater for salmon exports, according to Air Cargo News.