LATAM Airlines considers issuing green bond, Mexico head says

LATAM Airlines is considering issuing a so-called "green bond" as part of its sustainability strategy, the carrier's Mexico country head said in an interview on Wednesday, a move that would bolster its finances after emerging from bankruptcy. "We're feeling really strong after Chapter 11 (bankruptcy proceedings in the U.S.). We came out of that really secure," said Diana Olivares, the airline's top executive in Mexico. LATAM declared bankruptcy in 2020 after the COVID-19 pandemic battered travel demand. Last November, the carrier completed its restructuring process and has posted profits since. LATAM Airlines is reviewing "different types of bonds," Olivares said, "but we're looking to make sure they meet the proper requirements." She did not provide more detail into the potential bond issue, such as how much it would seek to raise. A green bond issue would put LATAM among the few airlines to have taken such a step. Mexican airline Volaris became the first, and only, carrier in the region to put out a sustainability-linked bond in 2021. Olivares, who is also the head of the country's air transportation industry group, added that Mexican airlines were looking to develop the use of sustainable aviation fuel (SAF) in the country. "We're practically still in diapers, and we're working against the clock," Olivares said. SAF is expected to have the largest impact on lowering airlines' carbon emissions, but still remains in scarce supply and is much costlier than traditional jet fuel. "We're looking to create a roadmap to present to the energy ministry, the transportation ministry," Olivares said. "We believe incentivizing (the use of SAF) is the best option."<br/>