Airlines LATAM files for Chapter 11
LATAM Airlines Group and its affiliates have announced that they have filed for voluntary protection under the U.S. Chapter 11.
LATAM Airlines Group and its affiliates in Chile, Peru, Colombia, Ecuador and the United States have decided to file for the voluntary protection under Chapter 11. This will see a financial reorganization process being performed. The group´s affiliates in Argentina, Brazil and Paraguay are not included in the filing.
The decision was confirmed with the support of the Cueto and Amaro families and Qatar Airways, the two largest shareholders of LATAM. During the Coronavirus, the company is heavily struggling with its finances and with this stabilization package the group could have the opportunity to be operational profitable again.
The reorganization process provides LATAM with the opportunity to work with the group´s creditors and other stakeholders in order to reduce its debt. Furthermore, the company could gain access to new sources of financing so that it can continue its operations.
Chapter 11 is a proven legal framework under which LATAM and the affiliates in Chile, Peru, Colombia, Ecuador and the United States have the chance to resize their operations to the new demand environment. This allows the airlines to be more agile, resilient and sustainable.
Roberto Alvo, Chief Executive Officer of LATAM commented: “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.”
Ignacio Cueto, Chairman of LATAM’s Board of Directors added: “Faced with the biggest crisis in the history of aviation, the Board has approved this path forward having analysed all the available alternatives to ensure the sustainability of the group. As we have adapted to new realities in the past, we are confident that LATAM will be able to succeed in the post-COVID-19 context and continue to serve Latin America, connecting the region with the world.”
The group has announced, that it is actively preparing to welcome passengers back once the travel prohibitions are lifted are more passengers are willing to fly.
Source © latamairlinesgroup.net