Largest airline files for bankruptcy
The company said that, the biggest air carrier of Latin America, LATAM filed for loss in the United States, following a huge plunge in business induced by the coronavirus outbreak. The global travel and tourism sectors have been damaged by the virus as they are impacted by border closures as well as population shutdowns. The CEO of airline Roberto Alvo said that considering the affect that the coronavirus-made has had on the airline industry, LATAM has been forced to generate numerous hard decisions in the last few months.
He said that the airline group and its offices in Peru, Colombia, Chile, and Ecuador entered into an independent reorganization under Chapter 11 security in the United States. The proceedings of Chapter 11 permit a firm that it is no longer to refund its allowance to redesign without pressure from creditors. Previous months, the Chilean-Brazilian airline stated that it was restarting its operations by 95 % in response to the worldwide health disaster. LATAM said that there would be no quick affect on passenger or flights.
The United States Chapter 11 fiscal reorganization procedure offers a clear and guiding opportunity to operate with the creditors and other stakeholders of the airline to minimize debt, represent commercial threats that the airline is facing. It came just two weeks after the 2nd biggest airline of Latin America, Avianca, also filed for insolvency in the United States of America to rearrange its debt because of the undecided impact of the COVID-19.