No. 1 Newswire for Airline Industry!

Full width home advertisement

Post Page Advertisement [Top]

Reuters - LATAM Airlines Group, the largest carrier of South America, filed for U.S. bankruptcy protection on May 26. The airline is now the world’s largest operator so far to look for an emergency reorganization due to the global crisis that hit the airline industry.

The filing highlights the financial weakness of Latin America’s carriers, following a similar bankruptcy earlier this month by the region’s No. 2 airline Avianca Holdings AVT_p.CN.

But unlike Avianca, which experienced management turmoil and losses, Chile’s LATAM posted profits for the last four consecutive years totaling more than $700 million. LATAM had also approved a dividend payment this year, in contrast to other carriers that have halted payouts.
One of the world’s largest airlines, LATAM said it would continue to fly through its bankruptcy restructuring.

LATAM shares sank 51% in Santiago, while ADRs remained suspended in U.S. trading. Latin American governments, many under severe budget constraints themselves, have been reluctant to bail out their key airlines, in contrast to the United States and Europe.

Most recently, Germany bailed out Lufthansa for a 20% stake.
Chile’s Economy Minister Lucas Palacios said on Tuesday he would not rule out a bailout, although he did not propose one.

“Lufthansa’s case is completely different,” 

Palacios said.

“LATAM is an international airline, its shares trade in the United States.”

In a separate statement, Chile’s finance ministry said LATAM is a “strategic company for Chile” and that the government would “consider” how it could contribute to LATAM’s restructuring. In Brazil, LATAM has been negotiating a bailout of up to 2 billion reais ($367.45 million) that has yet to materialize.

LATAM’s Brazil unit is not part of the bankruptcy, and the company said it might file for bankruptcy there as well if the negotiations for aid fall through.

Delta Air Lines last year paid $1.9 billion for a 20% stake in LATAM during rosier times for the air travel industry, becoming the No. 2 shareholder in the company.
Subscribe to our "FREE NEWSLETTER"
Your email address:*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

Bottom Ad [Post Page]