Latam Airlines Group has filed for Chapter 11 bankruptcy, as the group faces “the biggest crisis in the history of aviation”.
Latin America’s largest carrier insisted the move would not affect its passenger or cargo operations, reservations or vouchers.
Attributing the move to the Covid-19 crisis, the group said in a statement the reorganisation process would provide Latam “with an opportunity to work with the group’s creditors and other stakeholders to reduce its debt, access new sources of financing and continue operating, while enabling the group to adapt its business to this new reality.”
Roberto Alvo, chief executive of Latam added: “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.
“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 said it had secured the financial support of shareholders, including Qatar Airways, to provide up to $900 million in debtor-in-possession financing.
It added that along with its affiliates it was also “in discussions with the respective governments of Chile, Brazil, Colombia and Peru to assist in sourcing additional financing, protect jobs where possible and minimise disruption to its operations”.