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2020-05-26 05:01:50.721 GMT
By Jeremy Hill and Eduardo Thomson
(Bloomberg) -- Latam Airlines Group SA, Latin America’s
largest air carrier, sought bankruptcy court protection in New
York after the Covid-19 pandemic grounded flights across the
region.
The Chapter 11 petition allows Latam to keep operating
while the Chilean carrier works out a plan to pay creditors and
turn around the business. Latam, whose shareholders include
Chile’s Cueto family and Delta Air Lines Inc., continues to
operate on a reduced schedule, and it has commitments for a
bankruptcy loan of up to $900 million.
The money is coming from shareholders including the Cuetos,
the Amaro family and Qatar Airways, according to a company
statement. Latam also has about $1.3 billion in cash on hand.
Airlines the world over -- and those in Latin America in
particular -- have been hit hard by the coronavirus outbreak,
which triggered travel bans and made people reluctant to fly.
Avianca Holdings SA, the largest air carrier in Colombia, filed
for Chapter 11 bankruptcy earlier in May, burdened by the sharp
drop in fliers and its own onerous debt load.
Latam’s affiliates in Brazil, Paraguay and Argentina aren’t
part of the bankruptcy case, which was filed in the Southern
District of New York.
Still, the impact will be felt widely, with Santiago-based
Latam previously serving more than 70 million passengers a year
on more than 300 aircraft. It also carried more than $7 billion
of debt.
Latam has already eliminated more than 1,850 jobs in Chile,
Colombia, Ecuador and Peru in recent weeks from its global
workforce of about 40,000 people, after cutting 95% of its
passenger operations. In some bankruptcy scenarios, an airline
can reject aircraft leases, and Latam has more than 20 jetliners
on order from Airbus SE and half a dozen from Boeing Co.
“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,” Chief Executive Officer Roberto Alvo said
in a statement.
Latam listed assets of more than $21 billion and total
liabilities of almost $18 billion in its bankruptcy petition.
So far, Latam hasn’t had access to government bailout
packages designed help offset virus-related distress. Talks are
underway with governments in Chile, Brazil, Colombia and Peru
about additional financing and assistance, the airline said.
By Jeremy Hill and Eduardo Thomson
(Bloomberg) -- Latam Airlines Group SA, Latin America’s
largest air carrier, sought bankruptcy court protection in New
York after the Covid-19 pandemic grounded flights across the
region.
The Chapter 11 petition allows Latam to keep operating
while the Chilean carrier works out a plan to pay creditors and
turn around the business. Latam, whose shareholders include
Chile’s Cueto family and Delta Air Lines Inc., continues to
operate on a reduced schedule, and it has commitments for a
bankruptcy loan of up to $900 million.
The money is coming from shareholders including the Cuetos,
the Amaro family and Qatar Airways, according to a company
statement. Latam also has about $1.3 billion in cash on hand.
Airlines the world over -- and those in Latin America in
particular -- have been hit hard by the coronavirus outbreak,
which triggered travel bans and made people reluctant to fly.
Avianca Holdings SA, the largest air carrier in Colombia, filed
for Chapter 11 bankruptcy earlier in May, burdened by the sharp
drop in fliers and its own onerous debt load.
Latam’s affiliates in Brazil, Paraguay and Argentina aren’t
part of the bankruptcy case, which was filed in the Southern
District of New York.
Still, the impact will be felt widely, with Santiago-based
Latam previously serving more than 70 million passengers a year
on more than 300 aircraft. It also carried more than $7 billion
of debt.
Latam has already eliminated more than 1,850 jobs in Chile,
Colombia, Ecuador and Peru in recent weeks from its global
workforce of about 40,000 people, after cutting 95% of its
passenger operations. In some bankruptcy scenarios, an airline
can reject aircraft leases, and Latam has more than 20 jetliners
on order from Airbus SE and half a dozen from Boeing Co.
“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,” Chief Executive Officer Roberto Alvo said
in a statement.
Latam listed assets of more than $21 billion and total
liabilities of almost $18 billion in its bankruptcy petition.
So far, Latam hasn’t had access to government bailout
packages designed help offset virus-related distress. Talks are
underway with governments in Chile, Brazil, Colombia and Peru
about additional financing and assistance, the airline said.
