LATIN American carrier LATAM Airlines has announced a major restructuring of its debt by filing for Chapter 11 protection in the United States – a move the airline said was necessary to keep it afloat during the pandemic.
The reordering of its books has also seen financial injections from major shareholders Qatar Airways and the Cueto and Amaro families, providing a welcome US$900 million cash boost to its ailing operations.
In a statement released today, LATAM said the Chapter 11 financial reorganisation process would allow for an opportunity to resize its operations to the “new demand environment”, and the ability to reorganise its balance sheets as it responds to the global slowdown in air traffic demand.
“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…brought aviation to a virtual standstill,” said CEO Roberto Alvo.
“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,” he added.
In a letter addressed to agents, LATAM also assured its clients that there would be no reduction in the value of any accrued frequent flyer miles or points, and that its loyalty and reservation processes would continue unaffected.
LATAM and its affiliates are also in discussions with the governments of Chile, Brazil, Colombia and Peru to source further financial relief to help protect jobs and minimise disruption to its operations.
The post LATAM files for Chapter 11 appeared first on Travel Daily.
Source: traveldaily