Just a few weeks after Latin American Avianca filed for chapter 11 bankruptcy, the continent’s largest airline LATAM has to follow its footsteps. The good news is that the airline will resume operations during this procedure.
Similar to Avianca, the LATAM Airline Group is a Holding with numerous subsidiaries in different South American countries. The branches in Chile, Peru, Colombia, Ecuador and the United States of America declared bankruptcy. On the other hand, LATAM Brazil (formerly TAM), Argentina and Paraguay are not affected by this.
The holding intends to uphold existing bookings, vouchers and LATAM Pass miles. Sadly, as a consequence of this development, customers who are waiting for refunds due to cancelled flights may be out of luck. In past airline insolvencies, a chargeback has emerged as the best option to get your money back nonetheless. LATAM itself decided to offer vouchers instead.
You can find further information on LATAMreorganizacion.com. The airline has set up this website especially for this occasion.
Concerning LATAM
LATAM came to existence in 2012 after a merger of Chilean LAN Airlines and Brazilian TAM Linhas Aéreas. Both companies remain legally separated, but are publicly using the LATAM brand. The bankruptcy mainly affects subsidiaries of LAN Airlines.
In September 2019 Delta Air Lines announced that it acquired a 20% stake in LATAM Airlines, worth nearly 2 billion $. As a result, LATAM left Oneworld Alliance on May 1, 2020. The airline is currently not a member of any major airline alliance, but is still affiliated with former Oneworld partners like British Airways.
Chapter 11
Chapter 11 bankruptcy is nothing new to international airlines, as many have gone this way before in the last 20 years. Especially in the aftermath of the September 11 terror attacks. American law allows airlines to resume operations while being protected from debtors. Any company with a branch in the USA can use its advantages. Because of this, it has become popular among international airlines to restructure while retaining close to normal operations under Chapter 11 rules.
Thanks to our source SamChui.com!