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LATAM files for bankruptcy in the US
LATAM Airlines, South America’s largest carrier, is the latest to require court-appointed help to navigate the worst crisis in air travel history.
LATAM filed for Chapter 11 bankruptcy in the United States and hopes to work with creditors and reorganize its finances.
It had already taken measures to reduce costs but says filing for bankruptcy is the best option to get through the crisis.
"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 LATAM CEO Roberto Alvo in a statement.
"We are focused on transforming our group to adapt to a new and evolving way of flying."
LATAM affiliates in Chile, Brazil, Colombia and Peru are seeking government funds to protect jobs and maintain current reduced levels of service.
Flights will continue during Chapter 11 proceedings and all tickets, travel vouchers and mileage awards will be honored.
It joins rival Avianca which filed for bankruptcy protection two weeks ago.
It is an extra headache for Delta Air Lines which has a 20% stake in LATAM and is closely aligned with it in a joint venture proposal.
"We remain firmly committed to our partnership with LATAM and believe that it will successfully emerge a stronger airline and Delta partner for the long term," said Delta CEO Ed Bastian.
According to the Chapter 11 filing LATAM has assets of $10 billion but its liabilities total $50 billion.
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