As most of the borders remain closed to contain the novel coronavirus, Latin America’s largest air carrier, LATAM Airlines Group SA has filed for bankruptcy in the U.S. on Tuesday.
With no immediate impact on its passenger or cargo flights, reservations, and employee salary, the statement reports of the airlines filing to reorganize Chapter 11 protection in the States. The petition allows the Chilean-Brazilian airline to work out plans to pay creditors and stakeholders, and address commercial challenges, like several others in the aviation industry. The carrier’s affiliates in Argentina, Paraguay and Brazil won’t be part of the bankruptcy filing, and would include the U.S., Chile, Colombia, Peru, and the Ecuador.
In a statement, the CEO of LATAM Roberto Alvo said that a series of measures have been implemented to mitigate the effect of the disruption caused by the coronavirus outbreak and the decision represents the best option.
Last month, the International Air Transport Association predicted the revenues in the airlines industry by $314 million in 2020, less than half of the revenue made last year. After stopping 95% of the passenger operations, LATAM has already removed more than 1,850 jobs in Peru, Chile, Ecuador, and Columbia from its global workforce of 40,000 employees.