Latam Airlines, the largest airline in Latin America, has filed for bankruptcy in one of the New York courts after suspension of flights throughout the region due to the COVID-19 pandemic. It is reported by Bloomberg.
Having declared itself bankrupt following Chapter 11 of the United States Bankruptcy Code, the airline is trying to defer payments to creditors.
This chapter provides for the reorganization and restoration of companies. Bankruptcy is considered as an administrative process, giving the debtor the right after reorganization to start work again.
“We recently announced a reorganization process under Chapter 11 of the US Bankruptcy Code, and we want you to know that our operations will continue without any consequences,” the company’s Latam Airlines representative wrote on Twitter, posting a photo signed “We will continue to fly.”
The airline clarified that it intends to transform its business, adapt it to new realities after the pandemic, and ensure its long-term sustainability.
“Latam entered the COVID-19 pandemic as a healthy and profitable airline, but exceptional circumstances led to the collapse of global demand, which not only led aviation to stagnation but also changed the industry in the foreseeable future,” said Roberto Alvo, chief executive of the group. reports The Financial Times.
Bloomberg recalled that the airline, after suspending 95% of passenger traffic, reduced more than 1.8 thousand from 40 thousand jobs in Chile, Colombia, Ecuador, and Peru.
According to the agency, Latam Airlines branches in Brazil, Paraguay, and Argentina are not included in the bankruptcy lawsuit, which was filed in court.
In May 2019, Latam Airlines took sixth place in the list of ten best airlines in the world according to AirHelp. The share of flights that she completed on time amounted to 77%.