LATAM provides an update on Chapter 11 proceedings
LATAM provided an update on its Chapter 11 bankruptcy proceedings, which the carrier has operated since May 2020, during its latest financial result announcement.
First things first, LATAM asked the U.S. Bankruptcy Court in the Southern District of New York for an extension for the deadline to file its reorganization plan, which the court granted. Now, the airline group has till June 30, to file the plan, with voting set to commence on August 23, 2021. While creditors have submitted over 6,000 claims, the airline is still in the process of estimating “the final number of claims and the value of such claims.”
The airline also pointed out that it is “currently evaluating the adequate fleet needs for the following years.” LATAM ended 2020 with 296 aircraft, with additional four aircraft leased out. Even prior to the bankruptcy and the current pandemic, the carrier transferred four already-delivered Airbus A350 aircraft, in addition to 10 order commitments for the wide-body to Delta Air Lines, as the US-based airline acquired a stake in LATAM in September 2020.
So far, out of its $2.45 billion Debtor-in-Possession (DIP) financing fund, the airline has made one withdrawal of $1.15 billion in October 2020. Another $150 million was withdrawn from the Toesca Deuda Privada DIP LATAM Fund. All in all, the company indicated it had $3 billion of liquidity at the end of the year, of which $1.7 billion was cash and equivalents. By the end of the year, the group’s debt was at $7.6 billion as it was reduced by $835 million compared to Q3 2020.
"2020 was the most challenging year in history for the aviation industry and for LATAM. Although the COVID19 crisis had profound effects on the group and its operations, and will continue to do so for a while, this context has allowed us to make decisions for change,” commented the CEO of LATAM Group, Roberto Alvo.
LATAM Airlines was joined by LATAM Brazil in Chapter 11 bankruptcy proceedings in July 2020, while LATAM Argentina closed down operations a month prior.
“We have no doubt that when the crisis passes, LATAM will operate as a strengthened group,” concluded Alvo.
The airline group ended 2020 with a net loss of $4.5 billion, as its revenue plummeted by 58.4% to $4.3 billion. Overall, LATAM carried 28.2 million passengers – a drop of 61.9% compared to 2019, when the airline group welcomed 74.1 million travelers onboard its aircraft.
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