(Reuters) – Chile’s LATAM Airlines Group (LTM.SN) filed for U.S. bankruptcy protection on Tuesday, becoming the world’s largest carrier so far to seek an emergency reorganization due to the coronavirus pandemic.
FILE PHOTO: The logo of LATAM Airlines is pictured on an Airbus plane in Colomiers near Toulouse, France, November 6, 2018. REUTERS/Regis Duvignau
The filing highlights the financial weakness of Latin America’s carriers and follows a similar bankruptcy reorganization earlier this month by its main rival, Colombia’s Avianca Holdings AVT_p.CN.
But unlike Avianca, which experienced management turmoil and losses, Chile’s LATAM posted profits for the last four consecutive years totaling more than $700 million.
LATAM, which has about $1.3 billion of cash on hand, recently approved a dividend payment, in contrast to other carriers that have halted payouts amid the crisis.
LATAM said it would continue to fly through its bankruptcy restructuring.
Latin American governments, many under severe budget constraints themselves, have been reluctant to bail out their key airlines, in contrast to the United States and Europe. Most recently, Germany bailed out Lufthansa for a 20% stake.
Chile’s Economy Minister Lucas Palacios said on Tuesday he would not rule out a bailout, although he did not propose one.
“Lufthansa’s case is completely different,” Palacios said. “LATAM is an international airline, its shares trade in the United St