Looking to ensure its long-term survival, LATAM Airlines Group and its affiliates in Chile, Peru, Colombia, Ecuador and the US have entered into a voluntary reorganisation and restructuring of their debt.
With the support of two of its largest shareholders, Qatar Airways and the Cueto and Amaro families, LATAM hopes its reorganisation under US Chapter 11 protection will enable it to emerge “more agile, resilient and sustainable”.
Latin America’s largest airline, LATAM blames the impact of coronavirus for its woes.
“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,” LATAM CEO Roberto Alvo said.
“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.”
While the airline works with creditors and other stakeholders to reduce its debt and transform its business to a “new reality”, LATAM and its affiliates will continue flying as conditions permit.
According to a LATAM statement, the group had around US$1.3 billion in cash on hand at the time of filing, and will seek support from their respective national governments to source extra financing.
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