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sxf24
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LATAM moving towards bankruptcy

Sat May 23, 2020 3:43 am

LATAM has missed multiple debt payments. It has limited opportunities to raise more cash and there’s increased speculation it could file for bankruptcy in the next few weeks. Without restructuring, current cash could be depleted by September.

From Fitch Ratings: “LATAM continues seek different avenues to preserve cash amid this quite turbulent period for the airline industry, which leaves creditors in a more vulnerable position. LATAM's current financial flexibility to raise new credit lines is quite limited, given market conditions. Financial support from the Brazilian government would only provide limited relief, as any funding would have to be used to support operations in the Brazilian market.”

https://www.fitchratings.com/entity/lat ... 16#ratings

Delta’s $1.9B investment is now worth about $300M. Any equity would likely be eliminated in bankruptcy.
Last edited by sxf24 on Sat May 23, 2020 4:06 am, edited 1 time in total.
 
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janders
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 4:03 am

Please provide source links when referencing information.
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dcajet
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 4:41 am

I'm afraid we will see LATAM follow in Avianca's footsteps. While Argentina (and Uruguay) seem under control, COVID is out of control in Brazil (already the second largest number of cases in the world) and increasing in Chile and Peru. These are most of LATAM's core markets.
Keep calm and wash your hands.
 
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Gonzalo
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 4:58 am

Well...yes...Every single privately owned airline in the whole planet is “towards bankruptcy” in the current scenario. Only the Airlines supported by endless flows of money like Emirates or Etihad can escape to the “towards bankruptcy” qualification. Same for Hotels, Cruise Ships and any leisure and travel related industry, since the demand will be literally flattened for several months, probably a couple of years, even after the borders re open and even after we start to have a vaccine available.
In the specific case of South America some Airlines could survive until August, others could reach October and Copa Airlines could resist until the end of the year, but that’s all.
The only way to avoid bankruptcy (if this current scenario remains unchanged in the continent ) will be through government loans or credits, the real question will be when, how much and under what kind of conditions this will be materialized...particularly in countries like Chile and Brazil where the uneducated and ignorant people doesn’t have a clue about the importance of aviation and the leftist will reject any loans ( unless they can impose some ridiculous and unfeasable conditions as usual ).

Rgds.
G.
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ojjunior
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 5:00 am

RG, TR and VP just called.
 
flyinghippo
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 5:06 am

You see DL's major investments/partners go down one by one... LATAM, VA, VS. KE and AF/KL are also in trouble but less so.

Even if DL is in a relatively good position after COVID, her major partners might be gone where DL will be crippled due to a lack of international partners.
 
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ojjunior
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 5:11 am

Gonzalo wrote:
Well...yes...Every single privately owned airline in the whole planet is “towards bankruptcy” in the current scenario. Only the Airlines supported by endless flows of money like Emirates or Etihad can escape to the “towards bankruptcy” qualification. Same for Hotels, Cruise Ships and any leisure and travel related industry, since the demand will be literally flattened for several months, probably a couple of years, even after the borders re open and even after we start to have a vaccine available.
In the specific case of South America some Airlines could survive until August, others could reach October and Copa Airlines could resist until the end of the year, but that’s all.
The only way to avoid bankruptcy (if this current scenario remains unchanged in the continent ) will be through government loans or credits, the real question will be when, how much and under what kind of conditions this will be materialized...particularly in countries like Chile and Brazil where the uneducated and ignorant people doesn’t have a clue about the importance of aviation and the leftist will reject any loans ( unless they can impose some ridiculous and unfeasable conditions as usual ).

Rgds.
G.


You folk realize that current Brazil govt is the polar opposite pf leftist, right?
 
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qf789
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 6:04 am

Please keep your posts related to aviation and keep the political comments out of the discussion
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FedexL1011
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 6:47 am

flyinghippo wrote:
You see DL's major investments/partners go down one by one... LATAM, VA, VS. KE and AF/KL are also in trouble but less so.

Even if DL is in a relatively good position after COVID, her major partners might be gone where DL will be crippled due to a lack of international partners.


You do realize the other big US carriers are in the same boat as DL? As someone else said in this thread all the airlines are in danger of being crippled depending on the outcome of the situation. I will add that VS is in trouble because the English government won't provide relief because of the 49% investment by DL. VA entered voluntary administration and they're still flying, albeit a heavily reduced schedule but to say that these airlines wont exist post COVID is poorly speculated.

If you could provide me info on how AA and UA will not be as crippled with a "lack" of international partners and or even go without filing bankruptcy themselves I will gladly admit I was wrong but to me your post is baseless and seems that you have an anti-DL attitude.
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Iluvtofly
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 7:13 am

*I will add that VS is in trouble because the English government won't provide relief because of the 49% investment by DL.*

Do you not realize that VS chose to base itself in a tax free haven and doesn't pay taxes in the UK ? So why should the British Gov't be responsible to assist them ? Let Sir RB on his Caribbean Island do that .....
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chonetsao
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 7:21 am

FedexL1011 wrote:
flyinghippo wrote:
You see DL's major investments/partners go down one by one... LATAM, VA, VS. KE and AF/KL are also in trouble but less so.

Even if DL is in a relatively good position after COVID, her major partners might be gone where DL will be crippled due to a lack of international partners.


You do realize the other big US carriers are in the same boat as DL? As someone else said in this thread all the airlines are in danger of being crippled depending on the outcome of the situation. I will add that VS is in trouble because the English government won't provide relief because of the 49% investment by DL. VA entered voluntary administration and they're still flying, albeit a heavily reduced schedule but to say that these airlines wont exist post COVID is poorly speculated.

If you could provide me info on how AA and UA will not be as crippled with a "lack" of international partners and or even go without filing bankruptcy themselves I will gladly admit I was wrong but to me your post is baseless and seems that you have an anti-DL attitude.


I don't think flyinghippo is anti-DL, but you are overly defensive to DL.

What flyinghippo was pointing out, is the DL's equity investment for partnership strategy. Such strategy failed many times among airlines like old Swiss, Etihad etc., even BA tried it few times on the old US and QF but ultimately bailed.

We know DL's investment in LATAM, VS and KE are falling, which will have a big impact on DL's balance sheet. By comparison, UA and AA has very limited investment on other airlines. DL might be doing better than UA and AA now. But, as time goes by, time will tell whether DL's equity investment for partnership strategy would work or not. You might be a DL funboy, but you will need to allow other people questioning and criticise DL's strategies. There is a legitimate concern here.

LATAM's bankruptcy will force DL either to come to rescue or to write off its investment. Either way it will have a huge impact on DL's Latin America strategy even when things go back to normal again in few years time.
 
Jomar777
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 8:33 am

Gonzalo wrote:
Well...yes...Every single privately owned airline in the whole planet is “towards bankruptcy” in the current scenario. Only the Airlines supported by endless flows of money like Emirates or Etihad can escape to the “towards bankruptcy” qualification. Same for Hotels, Cruise Ships and any leisure and travel related industry, since the demand will be literally flattened for several months, probably a couple of years, even after the borders re open and even after we start to have a vaccine available.
In the specific case of South America some Airlines could survive until August, others could reach October and Copa Airlines could resist until the end of the year, but that’s all.
The only way to avoid bankruptcy (if this current scenario remains unchanged in the continent ) will be through government loans or credits, the real question will be when, how much and under what kind of conditions this will be materialized...particularly in countries like Chile and Brazil where the uneducated and ignorant people doesn’t have a clue about the importance of aviation and the leftist will reject any loans ( unless they can impose some ridiculous and unfeasable conditions as usual ).

Rgds.
G.


You were doing really well until you managed to offend Brazilians and Chileans calling them ignorant. Have you forgot who is YOUR President and how was he elected (i.e. democratic vote...)??

Please do not call other people ignorant. Also, Brazil has a Far-RIGHT government nowadays.

Back to business: The first part of your comment is spot-on. Every single airline, cruisers, hotels, etc will be exposed. In the UK, one of the biggest Holiday Chains has just gone under yesterday with losses of about 20,000 employees.

South America is now particularly vulnerable, not only because of inaction from some governments (Brazil above all...) but also due to the fact that Winter is coming there whereas we in Europe are going through the Summer. It will not be arctic cold there but enough to trigger a very strong outbreak. I wonder how it will be in the Northern Hemisphere after since we programmed to avoid spread rather than heard disease and, this October/November it will be the first time that COVID19 will come to a Full Northern Winter.

Lots of carriers like Lufthansa, AF/KL are receiving help but will they not need further help in future (i.e. end of the year)? Even more if Lockdown stands through the whole summer? Time will tell.
 
davidjohnson6
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 8:36 am

DL is in enough trouble domestically so does not have spare cash to invest in LATAM. DL has taken cash from the US Govt, so DL will not be allowed to invest significant quantities of money in non-US airlines

If LATAM needs money, they will have to look at sources othen than DL
Last edited by davidjohnson6 on Sat May 23, 2020 8:55 am, edited 1 time in total.
 
pipeafcr
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 8:38 am

We could see the liquidation of a national subsidiary. IMO it would be LATAM Colombia
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gkirk
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 8:51 am

Iluvtofly wrote:
*I will add that VS is in trouble because the English government won't provide relief because of the 49% investment by DL.*

Do you not realize that VS chose to base itself in a tax free haven and doesn't pay taxes in the UK ? So why should the British Gov't be responsible to assist them ? Let Sir RB on his Caribbean Island do that .....

You do realise VS are based in the UK and pay UK taxes?
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SA280
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 9:26 am

Latam apparently stopped redeeming miles and many employees had salaries for the coming months paid in advance yesterday. They might apply for judicial protection very soon
 
Westerwaelder
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 12:07 pm

gkirk wrote:
Iluvtofly wrote:
*I will add that VS is in trouble because the English government won't provide relief because of the 49% investment by DL.*

Do you not realize that VS chose to base itself in a tax free haven and doesn't pay taxes in the UK ? So why should the British Gov't be responsible to assist them ? Let Sir RB on his Caribbean Island do that .....

You do realise VS are based in the UK and pay UK taxes?


Not this again. They made years of successive losses and paid therefore zero tax in the UK. What they have paid are royalties for the Virgin name to...you guessed it, the holding company based in the BVI.
 
onwFan
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 2:01 pm

sxf24 wrote:
Delta’s $1.9B investment is now worth about $300M. Any equity would likely be eliminated in bankruptcy.

Actually that is even smaller than the additional $350 million that DL pumped into LA as oneworld exit fee.
 
Detroit313
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 4:03 pm

Latin America is a mess. Winter is coming there and things are getting really bad.
 
pipeafcr
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 4:32 pm

Detroit313 wrote:
Latin America is a mess. Winter is coming there and things are getting really bad.


.... the US is a mess. Anyways if you pay attention to the news you’ll know that this virus is not highly affected by the climate. What is worrisome is that all those states like TX and which have opened earlier will bring up cases. The AV industry is going to be facing difficulties EVERYWHERE so try not to point fingers like that
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Junglejames
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 4:51 pm

Iluvtofly wrote:
*I will add that VS is in trouble because the English government won't provide relief because of the 49% investment by DL.*

Do you not realize that VS chose to base itself in a tax free haven and doesn't pay taxes in the UK ? So why should the British Gov't be responsible to assist them ? Let Sir RB on his Caribbean Island do that .....
Once again, incorrect.
Virgin Atlantic are based in the UK, as are the immediate parent company.

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PPVLC
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 5:43 pm

[quote="Gonzalo"]Well...yes...Every single privately owned airline in the whole planet is “towards bankruptcy” in the current scenario. Only the Airlines supported by endless flows of money like Emirates or Etihad can escape to the “towards bankruptcy” qualification. Same for Hotels, Cruise Ships and any leisure and travel related industry, since the demand will be literally flattened for several months, probably a couple of years, even after the borders re open and even after we start to have a vaccine available.
In the specific case of South America some Airlines could survive until August, others could reach October and Copa Airlines could resist until the end of the year, but that’s all.
The only way to avoid bankruptcy (if this current scenario remains unchanged in the continent ) will be through government loans or credits, the real question will be when, how much and under what kind of conditions this will be materialized...particularly in countries like Chile and Brazil where the uneducated and ignorant people doesn’t have a clue about the importance of aviation and the leftist will reject any loans ( unless they can impose some ridiculous and unfeasable conditions as usual ).


I'm intrigued by your statement " where the uneducated and ignorant people doesn’t have a clue about the importance of aviation and the leftist will reject any loans ( unless they can impose some ridiculous and unfeasable conditions as usual )" . Would you kindly elaborate on that? How would the uneducated interfere -either negatively or positively - in Latam's possible bankrupcy? Who would be the loan rejecting leftists in this case? :scratchchin:
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Continental767
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 6:18 pm

chonetsao wrote:
FedexL1011 wrote:
flyinghippo wrote:
You see DL's major investments/partners go down one by one... LATAM, VA, VS. KE and AF/KL are also in trouble but less so.

Even if DL is in a relatively good position after COVID, her major partners might be gone where DL will be crippled due to a lack of international partners.


You do realize the other big US carriers are in the same boat as DL? As someone else said in this thread all the airlines are in danger of being crippled depending on the outcome of the situation. I will add that VS is in trouble because the English government won't provide relief because of the 49% investment by DL. VA entered voluntary administration and they're still flying, albeit a heavily reduced schedule but to say that these airlines wont exist post COVID is poorly speculated.

If you could provide me info on how AA and UA will not be as crippled with a "lack" of international partners and or even go without filing bankruptcy themselves I will gladly admit I was wrong but to me your post is baseless and seems that you have an anti-DL attitude.


I don't think flyinghippo is anti-DL, but you are overly defensive to DL.

What flyinghippo was pointing out, is the DL's equity investment for partnership strategy. Such strategy failed many times among airlines like old Swiss, Etihad etc., even BA tried it few times on the old US and QF but ultimately bailed.

We know DL's investment in LATAM, VS and KE are falling, which will have a big impact on DL's balance sheet. By comparison, UA and AA has very limited investment on other airlines. DL might be doing better than UA and AA now. But, as time goes by, time will tell whether DL's equity investment for partnership strategy would work or not. You might be a DL funboy, but you will need to allow other people questioning and criticise DL's strategies. There is a legitimate concern here.

LATAM's bankruptcy will force DL either to come to rescue or to write off its investment. Either way it will have a huge impact on DL's Latin America strategy even when things go back to normal again in few years time.


The reality is this. If LATAM does indeed go bankrupt, DL is unlikely to swoop in. They’re losing around $50 million dollars every day at this point, along with the rest of the US3. They’ll be focused on preserving capital to prevent a bankruptcy of their own.

EDIT: Typo
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wenders825
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 7:00 pm

remember when everyone said delta investing in latam was such a major, groundbreaking move
 
dcajet
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 7:16 pm

wenders825 wrote:
remember when everyone said delta investing in latam was such a major, groundbreaking move


Please. If airlines had a crystal ball, each one would be an unmitigated success. Alas, such is life. No one knew back in September what was coming our way, and that includes you.
Keep calm and wash your hands.
 
tphuang
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 7:17 pm

There is still a good chance that most of DL's investment recover their value and things won't look so bad 2 or 3 years from now. But there is also a chance a lot of DL's investment go under and they will be around in a much reduced capacity unable to contribute much to the JVs. For all the complaints about buybacks, here is a cautionary tale about over investment into less successful airlines during good times. I wonder what kind of capacity Latam will be in after this and whether or not they are regretting dumping AA for DL.
 
Antarius
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 7:22 pm

wenders825 wrote:
remember when everyone said delta investing in latam was such a major, groundbreaking move


There are decisions that are bad by definition and there are decisions that end up poorly due to circumstances that one could not foresee.

No one could have expected the COVID impact. It's not like DL bought Air India or Alitalia.
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FedexL1011
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 7:25 pm

chonetsao wrote:
FedexL1011 wrote:
flyinghippo wrote:
You see DL's major investments/partners go down one by one... LATAM, VA, VS. KE and AF/KL are also in trouble but less so.

Even if DL is in a relatively good position after COVID, her major partners might be gone where DL will be crippled due to a lack of international partners.


You do realize the other big US carriers are in the same boat as DL? As someone else said in this thread all the airlines are in danger of being crippled depending on the outcome of the situation. I will add that VS is in trouble because the English government won't provide relief because of the 49% investment by DL. VA entered voluntary administration and they're still flying, albeit a heavily reduced schedule but to say that these airlines wont exist post COVID is poorly speculated.

If you could provide me info on how AA and UA will not be as crippled with a "lack" of international partners and or even go without filing bankruptcy themselves I will gladly admit I was wrong but to me your post is baseless and seems that you have an anti-DL attitude.


I don't think flyinghippo is anti-DL, but you are overly defensive to DL.

What flyinghippo was pointing out, is the DL's equity investment for partnership strategy. Such strategy failed many times among airlines like old Swiss, Etihad etc., even BA tried it few times on the old US and QF but ultimately bailed.

We know DL's investment in LATAM, VS and KE are falling, which will have a big impact on DL's balance sheet. By comparison, UA and AA has very limited investment on other airlines. DL might be doing better than UA and AA now. But, as time goes by, time will tell whether DL's equity investment for partnership strategy would work or not. You might be a DL funboy, but you will need to allow other people questioning and criticise DL's strategies. There is a legitimate concern here.

LATAM's bankruptcy will force DL either to come to rescue or to write off its investment. Either way it will have a huge impact on DL's Latin America strategy even when things go back to normal again in few years time.


I wasn’t intending to be overly defensive, my apologies. As for being a “DL funboy” I guess if you want to call me that go ahead but I do not think they are perfect in any sense.

I think you nailed it on the head by saying time will tell, and I think that applies to any and all things concerned with the future of not only LATAM, DL, or anyone else but the whole industry. With regards to Latin America I the only real “winner” amongst the US3 will be AA as they do not rely on partners in the region.

I know for a fact if LATAM were to go into bankruptcy and restructure DL will be forced to right off an investment, and that is so for any other partners. Most airlines are no don’t have government backing are at risk. I feel for most carriers with investments in foreign airlines there will be a restructuring once the dust settles.

I wish nothing but the best for LATAM and their competitor Avianca, who has already filed for restructuring.
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lightsaber
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 7:29 pm

Antarius wrote:
wenders825 wrote:
remember when everyone said delta investing in latam was such a major, groundbreaking move


There are decisions that are bad by definition and there are decisions that end up poorly due to circumstances that one could not foresee.

No one could have expected the COVID impact. It's not like DL bought Air India or Alitalia.

Unfortunately, the LATAM investment in hindsight was a poor investment. However, at the time it was made, it seemed brilliant.


There were many investments that were wise investments that are now poor investments. No one should celebrate that, for every $100,000 or so lost is a job. At this time, we need to wish for job creation.


I feel for the LATAM employees. The road ahead is a tough one.

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dcajet
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 7:36 pm

SA280 wrote:
Latam apparently stopped redeeming miles and many employees had salaries for the coming months paid in advance yesterday. They might apply for judicial protection very soon


Source? Rumor? I find it strange that an airline that is fighting to conserve every penny it has to its name would go out on a limb and pay salaries in advance to part of its employees. Miles are a liability on any airline ledger. Why would they stop redeeming miles and hold on to an IOU? LATAM is not going out of business. Undoubtedly things are going to get ugly but it has many tools at its disposal to continue, eventually, as a viable business.
Keep calm and wash your hands.
 
onwFan
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 7:58 pm

As much as it seemed like a brilliant move for DL, the deal never made any sense as far as LA was concerned, now or back then. DL simply does not have the right hub/network structure which can benefit a Latin American carrier. Already a loss-making carrier, by giving up the domination it enjoyed at both MIA and MAD (its two single most important markets), LA simply wiped out every advantage it had over Avianca and all other Latin American airlines in one go. It was just a matter of time that LA ended up in a situation like this; and as expected, COVID has simply hastened the process.

There could not have been a worse time for leaving the most important/useful partners, giving up an alliance membership and giving up feed at the most important airports (when it had all three just a few months ago). That being said, I do wish LA and its employees good luck in navigating these tough times...
 
frontierflyer
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 8:27 pm

DL is also invested in AM , right ?
 
smartplane
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 8:36 pm

Jomar777 wrote:
Gonzalo wrote:
Well...yes...Every single privately owned airline in the whole planet is “towards bankruptcy” in the current scenario. Only the Airlines supported by endless flows of money like Emirates or Etihad can escape to the “towards bankruptcy” qualification. Same for Hotels, Cruise Ships and any leisure and travel related industry, since the demand will be literally flattened for several months, probably a couple of years, even after the borders re open and even after we start to have a vaccine available.
In the specific case of South America some Airlines could survive until August, others could reach October and Copa Airlines could resist until the end of the year, but that’s all.


The first part of your comment is spot-on. Every single airline, cruisers, hotels, etc will be exposed.

Lots of carriers like Lufthansa, AF/KL are receiving help but will they not need further help in future (i.e. end of the year)? Even more if Lockdown stands through the whole summer? Time will tell.

Most involved directly and indirectly in commercial aviation have needed new credit lines to stay in business. Not to grow their businesses, but to survive. Some savvy financiers exited while companies still had liquidity to repay, and others cancelled unused facilities. Now, everyone on board, is there for the duration, unless Government support can be used to retire debt (it shouldn't).

Financiers and lessors are re-negotiating covenants to avoid technical defaults. Some facilities have switched to deferred interest, and even interest free. Lease payments are being discounted, forgiven or added to end of lease final payments. Customers with new aircraft deliveries without any or full funding in place, are asking for deferred payments of up to 3 years. Major lenders have taken out some of the troublesome 'minnows'. But eventually, the capacity of financiers and lessors, or their financiers to assist, will evaporate.

In a normal downturn, there would be 'adventure' capital available from position takers keen to make strategic acquisitions. But not this time. At least not yet.

The outlook is so unforgiving, it's hard to persuade financiers to even accept 10 year old plus aircraft as security, because the potential cost of collection, storage, maintenance, and parting / selling, outweighs the market value. In the unlikely event a buyer is found, guess who will inevitably end up financing the sale, again.
 
dcajet
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 8:45 pm

frontierflyer wrote:
DL is also invested in AM , right ?


Si... to the tune of 49% of its shares
Keep calm and wash your hands.
 
kondoo
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 9:14 pm

Something it is true, LATAM would love to have AA right now to flow their passengers beyond MIA at this time.

Now AA gets to flow interior US to their international destinations on their own metal and LATAM, well they can keep Punta Arenas
 
flyinghippo
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 11:30 pm

FedexL1011 wrote:
flyinghippo wrote:
You see DL's major investments/partners go down one by one... LATAM, VA, VS. KE and AF/KL are also in trouble but less so.

Even if DL is in a relatively good position after COVID, her major partners might be gone where DL will be crippled due to a lack of international partners.


You do realize the other big US carriers are in the same boat as DL? As someone else said in this thread all the airlines are in danger of being crippled depending on the outcome of the situation. I will add that VS is in trouble because the English government won't provide relief because of the 49% investment by DL. VA entered voluntary administration and they're still flying, albeit a heavily reduced schedule but to say that these airlines wont exist post COVID is poorly speculated.

If you could provide me info on how AA and UA will not be as crippled with a "lack" of international partners and or even go without filing bankruptcy themselves I will gladly admit I was wrong but to me your post is baseless and seems that you have an anti-DL attitude.


When I mentioned that DL will be in trouble, it is specifically to its international network. DL relies more on its partners for international routes than UA and AA. DL has only one key partner in each area - KE for Asia (except China), LATAM for South America, VS for UK, and VA for Australia. If anyone of these carriers fails, DL would become strictly an O/D carrier to those continents/countries.

UA and AA flies to more international destinations, and their partners are relatively more healthy than DL's partners

AA has the majority are their respective country's "flag" carriers. (BA, IB, JL, QF), which BA has already granted bailout money from the UK government.
UA has LH group, which are also considered "flag" carries in their respective countries (CA. LH, AC)

DL - while they run a very efficient and arguably best-performing airline in the US (some might say top 10% in the world), their partners were mostly money-losing enterprises even before COVID - VS, VA, AF, and LATAM - and DL relies so heavily on each one of them to complete a significant percentage of their international network.
 
NYCVIE
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 11:41 pm

kondoo wrote:
Something it is true, LATAM would love to have AA right now to flow their passengers beyond MIA at this time.

Now AA gets to flow interior US to their international destinations on their own metal and LATAM, well they can keep Punta Arenas


Given that there is close to zero traffic and demand between the US and South America, I'm not sure AA is planting roses.
 
dcajet
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Re: LATAM moving towards bankruptcy

Sat May 23, 2020 11:46 pm

kondoo wrote:
Something it is true, LATAM would love to have AA right now to flow their passengers beyond MIA at this time.

Now AA gets to flow interior US to their international destinations on their own metal and LATAM, well they can keep Punta Arenas


Except that AA is not flying to anywhere in South America; and when it does, there won't be any masses to fly via MIA. Once LATAM resumes flying to the US, their partnership with DL can kick in to the extent that is possible.
Keep calm and wash your hands.
 
sxf24
Topic Author
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Re: LATAM moving towards bankruptcy

Sun May 24, 2020 12:12 am

While it is tough to argue Delta’s move WAS brilliant, in hindsight it was poorly timed and will probably amount to setting a dumpster full of money on fire. I must admit that I never would have expected LATAM to file for bankruptcy but when it happens, and I’m now certain it will, their future will be controlled by their creditors. One of LATAM’s largest creditor, if not the largest, is the US EX-IM Bank. US EX-IM and Delta are not friends and it would be interesting if US EX-IM and other creditors would support the continuation of that partnership.
 
onwFan
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Re: LATAM moving towards bankruptcy

Sun May 24, 2020 12:33 am

dcajet wrote:
kondoo wrote:
Something it is true, LATAM would love to have AA right now to flow their passengers beyond MIA at this time.

Now AA gets to flow interior US to their international destinations on their own metal and LATAM, well they can keep Punta Arenas


Except that AA is not flying to anywhere in South America; and when it does, there won't be any masses to fly via MIA. Once LATAM resumes flying to the US, their partnership with DL can kick in to the extent that is possible.

If you mean AA is not flying to South America today or next week, I don’t know what the relevance is. Neither is DL. If there is the slightest meaningful passenger demand between the US and South America, there is no doubt AA will jump in. It remains to be seen what LA’s US network even looks like when they emerge from the crisis.
 
onwFan
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Re: LATAM moving towards bankruptcy

Sun May 24, 2020 12:44 am

flyinghippo wrote:
DL - while they run a very efficient and arguably best-performing airline in the US (some might say top 10% in the world), their partners were mostly money-losing enterprises even before COVID - VS, VA, AF, and LATAM - and DL relies so heavily on each one of them to complete a significant percentage of their international network.

If I am not mistaken, their investments AM and MU were not making money either?
 
flyinghippo
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Re: LATAM moving towards bankruptcy

Sun May 24, 2020 12:46 am

onwFan wrote:
dcajet wrote:
kondoo wrote:
Something it is true, LATAM would love to have AA right now to flow their passengers beyond MIA at this time.

Now AA gets to flow interior US to their international destinations on their own metal and LATAM, well they can keep Punta Arenas


Except that AA is not flying to anywhere in South America; and when it does, there won't be any masses to fly via MIA. Once LATAM resumes flying to the US, their partnership with DL can kick in to the extent that is possible.

If you mean AA is not flying to South America today or next week, I don’t know what the relevance is. Neither is DL. If there is the slightest meaningful passenger demand between the US and South America, there is no doubt AA will jump in. It remains to be seen what LA’s US network even looks like when they emerge from the crisis.


And why don't you think DL/LA will not jump right in as well once passenger demand picks up between US and South America? LA's US network will depend on DL's network, and I'd argue that DL is better situated than AA at this moment in time.
 
flyinghippo
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Re: LATAM moving towards bankruptcy

Sun May 24, 2020 12:49 am

kondoo wrote:
Something it is true, LATAM would love to have AA right now to flow their passengers beyond MIA at this time.

Now AA gets to flow interior US to their international destinations on their own metal and LATAM, well they can keep Punta Arenas


What's the difference between LATAM using AA to flow their passengers beyond MIA vs leveraging DL's interior out of ATL? I'd argue DL has more connections from ATL than AA out of MIA.
 
davidjohnson6
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Re: LATAM moving towards bankruptcy

Sun May 24, 2020 12:51 am

At the risk of getting into deep trouble by writing this, large numbers of people in South America seems to have a deep desire to go to Miami. Atlanta just doesn't exert the same passion
 
kondoo
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Re: LATAM moving towards bankruptcy

Sun May 24, 2020 12:57 am

flyinghippo wrote:
kondoo wrote:
Something it is true, LATAM would love to have AA right now to flow their passengers beyond MIA at this time.

Now AA gets to flow interior US to their international destinations on their own metal and LATAM, well they can keep Punta Arenas


What's the difference between LATAM using AA to flow their passengers beyond MIA vs leveraging DL's interior out of ATL? I'd argue DL has more connections from ATL than AA out of MIA.



Oh yeah I forgot all of LATAM's flights into ATL
 
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NWAROOSTER
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Re: LATAM moving towards bankruptcy

Sun May 24, 2020 12:58 am

sxf24 wrote:
LATAM has missed multiple debt payments. It has limited opportunities to raise more cash and there’s increased speculation it could file for bankruptcy in the next few weeks. Without restructuring, current cash could be depleted by September.
Delta’s $1.9B investment is now worth about $300M. Any equity would likely be eliminated in bankruptcy.


I am sure that if Delta's $1.9B investment is written down, including bankruptcy, Delta will be able to file a tax lose and recover some of the lost investment. Delta may be able to acquire some of Latam's younger aircraft at a low price if they want any as there is not going to be a feeding frenzy on used aircraft. :old:
Procrastination Is The Theft Of Time.......
 
flyinghippo
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Re: LATAM moving towards bankruptcy

Sun May 24, 2020 1:05 am

davidjohnson6 wrote:
At the risk of getting into deep trouble by writing this, large numbers of people in South America seems to have a deep desire to go to Miami. Atlanta just doesn't exert the same passion


Your point is sound and logical, you won't get into trouble with that statement.

Let me put it from a SA passenger perspective...

Before DL's JV with LATAM:
If anyone from SA wants to go to Miami, they fly to Miami on LATAM or AA
If anyone from SA wants to go to anywhere else in the US, they fly to Miami on LATAM or AA, go through US immigration and customs in MIA, and connect to their final destination.

After DL's VJ with LATAM:
If anyone from SA wants to go to Miami, they fly to Miami on LATAM
If anyone from SA wants to go to anywhere else in the US, they fly to Atlanta on LATAM or DL, go through US immigration and customs in ATL, and connect to their final destination.

From a passenger perspective, nothing has changed, and I'd argue that ATL provides a better port of entry experience than MIA, and DL offers more connections from ATL than AA out of MIA.
 
tphuang
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Re: LATAM moving towards bankruptcy

Sun May 24, 2020 1:12 am

flyinghippo wrote:
davidjohnson6 wrote:
At the risk of getting into deep trouble by writing this, large numbers of people in South America seems to have a deep desire to go to Miami. Atlanta just doesn't exert the same passion


Your point is sound and logical, you won't get into trouble with that statement.

Let me put it from a SA passenger perspective...

Before DL's JV with LATAM:
If anyone from SA wants to go to Miami, they fly to Miami on LATAM or AA
If anyone from SA wants to go to anywhere else in the US, they fly to Miami on LATAM or AA, go through US immigration and customs in MIA, and connect to their final destination.

After DL's VJ with LATAM:
If anyone from SA wants to go to Miami, they fly to Miami on LATAM
If anyone from SA wants to go to anywhere else in the US, they fly to Atlanta on LATAM or DL, go through US immigration and customs in ATL, and connect to their final destination.

From a passenger perspective, nothing has changed, and I'd argue that ATL provides a better port of entry experience than MIA, and DL offers more connections from ATL than AA out of MIA.

Which would make their flights to Mia really uncompetitive.

Latam blew off partners at the two most important international markets for them for quick cash.
 
davidjohnson6
Posts: 610
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Re: LATAM moving towards bankruptcy

Sun May 24, 2020 1:17 am

Before - AA + LATAM needed to fly only MIA-South America. Can deploy very large aircraft as routes will be fat
After - DL+LATAM need to duplicate many routes, flying to both ATL and MIA from South America. Not a problem from Sao Paulo, but not so great from somewhere like Recife where routes are a bit thinner and there may not be profitable demand for a split focus city
 
usflyer msp
Posts: 3594
Joined: Tue May 23, 2000 11:50 am

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 1:21 am

flyinghippo wrote:
davidjohnson6 wrote:
At the risk of getting into deep trouble by writing this, large numbers of people in South America seems to have a deep desire to go to Miami. Atlanta just doesn't exert the same passion


Your point is sound and logical, you won't get into trouble with that statement.

Let me put it from a SA passenger perspective...

Before DL's JV with LATAM:
If anyone from SA wants to go to Miami, they fly to Miami on LATAM or AA
If anyone from SA wants to go to anywhere else in the US, they fly to Miami on LATAM or AA, go through US immigration and customs in MIA, and connect to their final destination.

After DL's VJ with LATAM:
If anyone from SA wants to go to Miami, they fly to Miami on LATAM
If anyone from SA wants to go to anywhere else in the US, they fly to Atlanta on LATAM or DL, go through US immigration and customs in ATL, and connect to their final destination.

From a passenger perspective, nothing has changed, and I'd argue that ATL provides a better port of entry experience than MIA, and DL offers more connections from ATL than AA out of MIA.


The difference is the cost of providing the service. With AA, LATAM pax could fly throughout the US via the MIA flights that LATAM was going to operate anyway due to the local demand. Now LA/DL have to add additional flights to ATL solely for connections or make their passengers double connect either of which is a much more expensive and/or less competitive method of serving the US-Latin America market.

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