One of Latin America's biggest and most well-known airlines, LATAM Airlines Group has filed for bankruptcy protection as the fallout of coronavirus COVID-19 pandemic continues to claim lives and businesses around the globe.
The carrier filed for U.S. bankruptcy protection on Tuesday, thereby becoming the largest airline to do so, at least so far. However, LATAM, one of the world’s biggest air carriers has confirmed it will continue to operate its flights throughout the bankruptcy and restructuring.
Just last month, the pandemic claimed about business in the shame of the second biggest airlines in the region, Avianca went into bankruptcy protection. However, Chile’s LATAM has posted profits for the last four consecutive years of over $700 million. LATAM had also approved a dividend payment this year.
LATAM is considered to be a “strategic company for Chile” the nation's government said on Tuesday and assured the community it would “consider” how best to contribute to the airline's recovery.
Lucas Palacios Chile’s Economy Minister said on Tuesday a state bailout hadn't been ruled out for the struggling carrier, although he was not proposing one, “LATAM is an international airline, its shares trade in the United States.”
The airline commented that as of Tuesday, it had $7.6 billion in debts, including $460 million in loans tied to its Brazilian subsidiary.
In Brazil, LATAM Brazil - not part of the bankruptcy protection has been negotiating a government bailout, which if granted could swell the airline's coffers by up to $367 million, however, nothing has been agreed so far.
LATAM confirmed it had already raised nearly $900 million in order to continue its operations during the reorganization process, mainly from existing major shareholders, including Qatar Airways and the Cueto family. According to aviation analysts, the airline also has $1.3 billion in cash on hand, and whilst it had cancelled and deferred some new aircraft orders, it would look to further consolidate its order book.
Delta had previously agreed to buy four Airbus A350 aircraft from LATAM, however, it has since cancelled that arrangement, paying in the region of $62 million to break the deal. The U.S. carrier currently owns around 20% of the company following a $1.9 billion investment last year.
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