On May 26, 2020, the Latam Airlines Group filed to reorganize under the protection of Chapter 11 of the US bankruptcy law, the Latam statement said.
The company's decision, which includes subsidiaries in Chile, Peru, Ecuador and Colombia, will not have an immediate impact on passenger or cargo flights, the statement clarified.
Before the pandemic, Latam flew to 145 destinations in 26 countries and made around 1,400 daily flights.
This is a new blow to the commercial aviation sector severely hit by the new coronavirus pandemic, which has caused the closure of borders and the confinement of billions of people.
"Given the impact that the crisis generated by covid-19 has had on the aviation industry, Latam has been forced to make a series of extremely difficult decisions in recent months," said company CEO Roberto Alvo.
"Latam Airlines Group and its subsidiaries in Chile, Peru, Ecuador and Colombia entered into a voluntary reorganization under the protection of Chapter 11 in the United States," said Alvo.
Chapter 11 allows a company that is unable to pay its debts to restructure without pressure from creditors.
Last month, the Chilean-Brazilian company said it had cut its operations by 95% due to the global health crisis and in early May announced hundreds of layoffs.
"The United States Chapter 11 financial reorganization process offers a clear and guided opportunity to work with our creditors and other stakeholders to reduce our debt," the company president said in the statement.
It also allows "addressing the business challenges that we, like others in our industry, face," added Alvo.