LATAM Airlines files for bankruptcy protection in US

South American carrier LATAM Airlines has filed for Chapter 11 bankruptcy protection in the US.

The airline, along with its affiliates in Chile, Peru, Colombia, Ecuador and the US, initiated the voluntary reorganisation and restructuring. The filing was backed by its largest shareholders Cueto and Amaro families and Qatar Airways.

LATAM chief executive officer Roberto Alvo said: “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 have 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.”

Cueto and Amaro families and Qatar Airways have agreed to provide up to $900m in debtor-in-possession (DIP) financing.

Additionally, the group and its affiliates are in talks with the governments of Chile, Brazil, Colombia and Peru for extra finance sourcing support to safeguard protect jobs and reduce operational disruption.

Earlier this month, LATAM Airlines Group and US carrier Delta Air Lines signed a joint venture agreement (JVA) to combine trans-American route networks.

Last month, Virgin Australia Holdings entered voluntary administration seeking bankruptcy protection amid the Covid-19 pandemic.