Latam Brasil, the Brazilian arm of the largest airline group in Latin America, is seeking bankruptcy protection in New York, according to a company statement. The division was kept out of a previous filing made by the Santiago-based group in May, which included its Chilean, Colombian, Peruvian, Ecuadorian and American affiliates.
“We are making this decision at this point so that the company can have access to new sources of financing. We are confident that we are moving responsibly and appropriately, as we have the challenge of transforming the company so that it adapts to the new post-pandemic reality and ensures its long-term sustainability,” said Jerome Cadier, CEO of Latam Brasil, in a company statement.
Latam Brasil is the latest in a string of Latin American air carriers to succumb to the severe downturn in travel caused by the Covid-19 pandemic. Compared to May 2019, the airline saw the number of passengers plunge by 95% in Brazil. Apart from its sister divisions, Colombia’s Avianca and Aeromexico also sought protection under the so-called Chapter 11 of the U.S. bankruptcy law.
The Brazilian airline still expects the country’s government would grant a loan to the sector, and says the recovery plan presented at the New York court may facilitate these negotiations by offering safer options to lenders.
The firm also informed that it will continue to operate passenger and cargo flights normally,” as Latam Airlines Group and its affiliates have done since they entered Chapter 11. “Likewise, obligations to employees, including pay and benefits will be respected.”