LATAM Airlines Group completes restructuring and exits Chapter 11

LATAM Airlines Group has completed its financial restructuring and has exited bankruptcy proceedings. The Santiago-based carrier said on 3 November that it emerges from the more than two-year process “with over $2.2b of liquidity, approximately $3.6b less debt on its balance sheet (equivalent to a 35% debt reduction from the pre-filing period) and the support of key incumbent and new shareholders”. “Today marks an important milestone for LATAM and our stakeholders,” says Roberto Alvo, LATAM’s chief executive. “We are pleased that we have completed a significant transformation and emerged from our financial restructuring process with a strengthened financial position and a renewed commitment to operational excellence.” LATAM is the last of three Latin American airlines to complete the process, following Colombia’s Avianca and Aeromexico. All three carriers voluntarily filed for protection under the US Chapter 11 bankruptcy scheme in mid-2020, as the rapidly spreading Covid-19 global pandemic caused chaos across the industry. Avianca emerged from Chapter 11 December 2021, and Aeromexico in March this year. In June, a US court approved LATAM’s restructuring plan, which included a $5.4b financing package backed by major shareholders – such as Delta Air Lines, Qatar Airways and Grupo Cueto – as well as key creditors, prompting the group to predict an exit from Chapter 11 in the second half of 2022. The carrier notes that it now operates the “most extensive network in South America”. In October it flew to 144 destinations in 22 countries and expects to end the year at “more than 85%” of pre-pandemic capacity as measured in available seat kilometres (ASKs). In 2021 and 2022, the airline added 10 new destinations in Brazil and plans to operate 36 new routes by 2023, it says. It expects to exceed pre-crisis revenue next year as well. <br/>