In just three weeks, Latin America’s largest airline, Latam Airlines, has starred in two black episodes. This Friday, during takeoff, a plane crashed its wing into a crossing fire engine on the runway of Peru’s Jorge Chávez airport in Lima, killing two and seriously injuring one. At the end of October, the 48 passengers who boarded Flight 1325 in Santiago de Chile bound for Asunción (Paraguay) were horrified by a violent hail storm. The plane made an emergency landing in Foz do Iguazú, Brazil, with no engine and nose destroyed. Amid the two incidents, the Chilean-Brazilian company completed its bankruptcy proceedings, elected its new board of directors and ended a pilot strike.
Having filed for bankruptcy law in May 2020 (Chapter 11) with the goal of reorganizing as a result of the pandemic, the company currently has more than $2.2 billion in liquidity and nearly $3.6 billion less than debt, 35 % lower than that registered before the bankruptcy was declared. As part of the closing process, the airline had to define a new ownership structure. Last Tuesday, at an extraordinary shareholders’ meeting of Latam, creditors acquired 66% and elected five of the nine members of the board of directors, while the former main shareholders – the Chilean Cueto family, which has run the company for more than three decades, Qatar Airways and Delta Air Lines – which now own about 27% of the company – have appointed the remaining four directors.
The former shareholders had to reinvest in convertible bonds and stocks after losing almost all of their original capital, according to the paper. Third. The four elected directors were brothers Ignacio and Enrique Cueto, who were already on the board, the former continuing as president, Brazil’s Sonia Villalobos, for Delta, and Alexander Wilcox, for Qatar Airways.
In 2020, during the pandemic, Latam laid off 240 pilots and cut employee salaries by about 30%. Last week, the Latam Pilots Union (SPL), made up of 300 professionals, threatened a strike if no agreement was reached to improve benefits lost during the emergency period. In extremis, the negotiations have progressed far enough to prevent the activities from being halted within 24 hours. The company assured on Tuesday that an extension of the mandatory mediation process has been agreed with the labor directorate for the next five working days “to allow the parties to review the wording of the respective collective instrument”. For its part, the union insisted the agreement “adjusts to what the company needs, but with guarantees of wage stability over time for workers.”
The Latam Airlines group traveled to 144 destinations in 22 countries last October and aims to end the year with more than 85% of the figures achieved in 2019, when the airline carried 74 million passengers to 145 destinations in 26 countries. As of the third quarter, the company has carried 45 million passengers, 78% more than in the first three quarters of 2021, a clear progress to shake off the hard blow caused by the pandemic.
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