Latam Airlines, the largest airline in Latin America, has filed a bankruptcy lawsuit in one of the New York courts after suspension of flights throughout the region due to the COVID-19 pandemic, Bloomberg reported.
Having declared itself bankrupt in accordance with the US Chapter 11, the airline is trying to defer payments to creditors.
This chapter provides for the possibility of reorganization and restoration of companies. Bankruptcy is considered as an administrative process, giving the debtor the right after reorganization to start work again.
The airline clarified that it intends to transform its business, adapt it to new realities after the pandemic, and ensure its long-term sustainability.
“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,” Reuters reported quoting Chief Executive Roberto Alvo.
Bloomberg recalled that the airline, after suspending 95% of passenger traffic, reduced over 1.8 thousand from 40 thousand jobs in Chile, Colombia, Ecuador, and Peru.
According to the agency, Latam Airlines branches in Brazil, Paraguay, and Argentina are not included in the bankruptcy lawsuit, which was filed in court.