SAO PAULO, July 9 (Xinhua) -- LATAM Airlines Brasil, the second-largest carrier operating in Brazil, said Thursday it filed for Chapter 11 bankruptcy protection in the United States amid the financial impact of the COVID-19 pandemic.
"LATAM Airlines Brasil today began a voluntary reorganization process as part of Chapter 11 protection in the United States to restructure its debt and effectively manage its aircraft fleet, while enabling operational continuity," the company said in a statement.
The carrier's affiliates in Chile, Peru, Colombia, Ecuador and the United States began their restructuring process on May 26, 2020.
Filing for Chapter 11 was "a natural step in light of the continuing COVID-19 pandemic," because it allows the carrier to reorganize its debts and access new financing to keep its operations going, the company said.
Companies or individuals whose businesses are at risk can file for Chapter 11 to restructure their debt payments so they can keep functioning.
The carrier, which operates both passenger and cargo flights, pledged to respect its "obligations to employees, including pay and benefits," and to "continue to fulfil its commitments to customers, with tickets, its frequent flyer program and flexibility policies," once the restructuring process allows it to do so.
LATAM Brasil owes some 7 billion reals (1.31 billion U.S. dollars), mainly to lenders and leasing companies.
The company was created when Chile's LAN merged with Brazil's TAM airlines.
Its holding company, Chile's Santiago-based LATAM Airlines Group, is also undergoing Chapter 11 restructuring. Enditem
