LATAM obtains US Court approval for reorganization plan, secures exit financing
LATAM Group announced that its total operating revenues reached $2.23 billion in the second quarter of the year. The airline also revealed it has gained US Court and shareholder approval for its reorganization plan and secured exit funding.
In the latest financial update, which the airline released on August 9, 2022, LATAM Group reported total operating revenues of $2.23 billion, a more than 150% increase compared to the previous year.
Despite the challenges presented by the sharp increase in fuel price during the three-month period, the group’s consolidated capacity during the quarter was around 72.6% of 2019 levels, the airline said. This figure has more than doubled when compared to the same quarter in 2021, growing by 135.2%.
“These figures are mainly a result of strong domestic markets, especially in Brazil, Colombia, and Ecuador, where the domestic affiliates have already surpassed 2019 levels in capacity, in addition to a marked recovery of the international operations during the current year,” the airline said in the financial report.
Meanwhile, LATAM’s capacity of Spanish-speaking affiliates, as well as the Brazilian affiliate, finished the Q2 reaching respectively 88.3% and 101.7% of capacity levels of the same period in 2019.
“International operations reached 55.8% of June 2019 [capacity] levels,” LATAM wrote.
“During the second quarter of 2022, LATAM group operations continued progressing on the recovery path as in the last quarters, hand in hand with the ease of travel restrictions in the region and healthy demand for air travel,” the carrier concluded.
However, by the end of Q2 2022, LATAM’s losses reached $523.2 million.
In addition to operating results, LATAM Group also announced it had obtained the approval of its Reorganization Plan from the United States Bankruptcy Court and secured its exit financing.
“At the Extraordinary Shareholders' Meeting, LATAM obtained the necessary approval from its shareholders for the company's new capital structure and the issuance of the financing instruments presented in the Plan, receiving the support of the vast majority of shareholders, corresponding to 99.8% of the shares present or represented at the Meeting, which correspond to 77.5% of the total shares with voting rights,” the airline explained.
This means that the airline is ready to begin the final stage of implementation of its reorganization plan in Chile.
“We have closed a second quarter with significant progress in our reorganization process under Chapter 11 and we hope to emerge from it during the last quarter of this year,” the airline’s chief executive, Roberto Alvo, said.
The carrier filed for Chapter 11 bankruptcy in the US in May 2020, citing the global pandemic as the main reason for its financial challenges.
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