Updated May 26, 2020 - Economy

LATAM Airlines files for U.S. chapter 11 bankruptcy

Rebecca Falconer

LATAM air attendants use protective gear. — A LATAM air attendant aboard one of the company's planes in March. Photo: Kike Calvo/Universal Images Group via Getty Images

LATAM Airlines Group SA said in a statement early Tuesday the firm and its affiliates in in the U.S., Chile, Peru, Colombia and Ecuador have filed for Chapter 11 bankruptcy protection in the U.S.

Why it matters: LATAM is Latin America's largest airline and its shareholders include Delta Air Lines. CEO Roberto Alvo noted in the statement the coronavirus pandemic has had a huge impact on the airline industry.

"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 not only brought aviation to a virtual standstill, but it has also changed the industry for the foreseeable future," Alvo said.

The big picture: The Chapter 11 filing would enable the Chilean carrier to continue operations on a reduced schedule as it looks to restructure and pay creditors.

The group said in the statement it has secured financial support from shareholders including Chile's Cueto family and Qatar Airways of up to $900 million in debtor-in-possession financing.
LATAM has about $1.3 billion in cash on hand, the statement added.

Editor's note: This article has been updated with new details throughout.

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LATAM Airlines files for U.S. chapter 11 bankruptcy

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