LATAM has today filed for Chapter 11 protection. The procedure will allow it to keep operating while it enjoys protecting from its creditors and restructures.

The LATAM Group while includes affiliates in Chile, Peru, Colombia, Ecuador and the United States have all filed for voluntary protection under the U.S. Chapter 11 financial reorganization process. (LATAM’s affiliates in Argentina, Brazil and Paraguay are not included in the filing.)

The group says its intention is to “ transform its business to maintain a leading position in Latin American aviation in the post COVID-19 era.”

Its regulatory statement says that

“This reorganization process provides LATAM with an opportunity to work with the group’s creditors and other stakeholders to reduce its debt, access new sources of financing and continue operating, while enabling the group to transform its business to this new reality.”

As part of the protection, existing shareholders Cueto Group and Qatar Airways have committed an  $900 million in additional financing to allow the airline to “continue flying with no impact on passenger or cargo operations, reservations, vouchers or LATAM Pass miles.”

The Chapter 11 financial reorganization process will allow LATAM to attempt to “resize its operations to the new demand environment and reorganize their balance sheets, enabling them to emerge more agile, resilient and sustainable”.

Roberto Alvo, Chief Executive Officer of LATAM  said

“LATAM entered the COVID-19 pandemic as a healthy and profitable airline group, yet exceptional circumstanceshave 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.”

“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.”

LATAM and its affiliates are also in discussions with their respective governments of Chile, Brazil, Colombia and Peru to assist in sourcing additional financing.

In 2019, the group carried a record 74 million passengers, 5.4 million more than in 2018, and had launched 26 new routes.

LATAM was keen to distinguish the Chapter 11 “reorganization process” from the concept of “quiebra”, “bancarrota”, or liquidation.

“LATAM intends to rely on specific relief that will allow it to pay its employees, meet benefit obligations, pay critical suppliers and conduct other day-to-day business operations as the group works with the court and creditors to resolve its case. With Chapter 11 protection, the group’s management team will remain in place and will continue to lead LATAM through the reorganization and transformation process.”

The group said that most of its debts are held in the United States. While most of LATAM’s affiliates are included in the reorganization process, several entities are not, “due to the nature of their debt structure and current financial status”.


The group says that it “understands that its employees around the world, their families, its suppliers and customers will have many questions” and has set up a website

where stakeholders can find additional key information about what this announcement means for them, although it admits it “may not have all the answers at this point.”