LATAM, the largest airline in South America, has gone partly into bankruptcy and partly not, a situation created by the Covid crisis, and by its complex history as an airline rooted in several different countries.
The airline was created nearly ten years ago by a merger of Brazil’s TAM airlines, and LAN, whose original home was Chile. Each carrier also had subsidiaries in a number of other South American countries. Because the airline is receiving government bailout funds in Brazil, Argentina and Paraguay, its operations in those countries are not part of the bankruptcy.
If that’s not confusing enough, the bankruptcy action that involves units in Chile, Colombia, Ecuador and Peru, was filed in U.S. Federal Bankruptcy Court in New York on Monday; its stock trades on both U.S. and Chilean exchanges.
The airline expects to keep flying while bankruptcy proceedings continue and has promised there will be no impact on plans for re-opening or on its LATAM Pass mileage program.
Turning a bad thing into a good one, at least for its own interests, the airline also indicated that it hopes the circumstances will help it get speedy approval from regulators for its proposed joint venture with Delta, which last year became a 20% owner of LATAM.
LATAM is the largest airline to enter bankruptcy during the virus crisis; the next two in size that fell are one of South America’s other big carriers, Avianca, and Virgin Australia.
Photo: Adam Moreira/Wikimedia
