THE LARGEST AIRLINE OF LATIN AMERICA INITIATED BANKRUPTCY PROCEEDINGS

The new coronavirus pandemic has seriously hit the airline industry. Previously, it was reported about the bankruptcy of the Colombian airline Avianca, and the problems of European and North American carriers. Now it comes to the giants - LATAM Airlines, the largest Latin American airline.

The representatives of LATAM Airlines Group filed a lawsuit in the court of the US on May 26. The appeal to the court of New York in accordance with Chapter 11 of the relevant U.S. law is not accidental, since the airline’s partners from Argentina, Brazil and Paraguay are excluded from the participation in the process.

The company, located in Chilean Santiago, according to one of the leaders of LATAM Roberto Alvo, went into crisis with profit.

However, the collapse that took place in the world influenced the demand by stopping the passenger flights and fundamentally changing the situation. The representatives of the company note that the negotiations with the authorities of several countries (Chile, Peru, Colombia) about the possibility of financial support and obtaining additional cash security are ongoing.

The carrier’s statement cites that the company currently manages the amount of $ 1.3 billion. A guarantee of $ 900 million has also been received as a loan, needed for bankruptcy, from the well-known families of Cueto and Amaro, as well as from the Qatar Airways.

We should recall that the history of LATAM is associated with the merger of the businesses of the Cueto family, the owners of the Chilean airline LAN, and the Amaro family, which owned the Brazilian company TAM in August 2010.

The merger ended by 2012, having received the relevant permissions from the authorities of the two countries and resolving the differences.

In recent years, the Amaro family has gradually reduced its share in the combined holding, engaged in the gradual sale of the financial assets. Now the majority of the company's shares (28.3%) are owned by the Cueto family, and the emir of Qatar owns a 10% share. Other well-known families (Eblen, Solari, Amaro) own small blocks of shares (from 3 to 6% each).

About 70 million passengers flew by the planes of LATAM Airlines Group to more than 300 destinations annually.

In last May, the Latin American carrier took sixth place in the list of ten best global airlines.

However, with the onset of the crisis and the suspension of almost all passenger communications, LATAM was forced to lay off 1800 employees from 40,000, working in different countries of Latin America.