LATAM Airlines Group has filed to reorganize under US Chapter 11 protection, according to a statement on its website.
The airline cites COVID-19 as the reason for this step, saying it entered the pandemic as a healthy and profitable airline group, yet circumstances have led to a collapse in global demand and brought aviation and revenues to a virtual standstill.
LATAM said it will continue to operate as travel restrictions and demand permit, paying its employees, meeting benefit obligations, and paying critical suppliers as well as respecting LATAM Pass miles and flight reservations, as the airline works through the Chapter 11 reorganization process.
US Chapter 11 is a financial reorganisation process providing an opportunity to work with creditors and other stakeholders to reduce debt and address commercial challenges, according to the statement. LATAM emphasized that Chapter 11 is different from the concept of bankruptcy in other countries, and is not a liquidation proceeding.
“We are looking ahead to a post-COVID 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,” said Roberto Alvo, ceo of LATAM Airlines Group.