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Continental767
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 12:05 pm

LawAndOrder wrote:
The Delta hate is real. QR couldn’t stop delta from connecting with LA they certainly won’t be pushing DL away. They will be a thorn but I’m sure QR/DL will learn to coexist. Yes they gain more from the bankruptcy loan but that doesn’t give them full ruling power. Plus the check hasn’t been written for all of the 350s. Delta could use those as bargaining power. QR wasn’t interested in keeping the 350s they had on lease from LA and as a consequence will be going to DL all of which QR could have prevented.

I think people are over stating what AA did For LA in Miami. Delta Could add 3 flights to the top 10 destinations (which they already serve 3).Delta could theoretically keep a subset of their 717s to cover when the demand returns using its current gates. That’s roughly 24 planes doing 2.5 turns a day. Add in a few 321s and you have the Demand covered for the top 20 connection markets for LA/AA feed. Someone please provide data to negate.

Plus strongest position in the second highest SA market at jfk and a even race in LA the third highest market. Not to mention a few new 350s they can throw on routes to aid LA. That all in addition to whatever they can squeeze out of atl. Just because you like an airline or work for it doesn’t mean what has prevailed before will always prevail. Will DL cripple AA no but did leaving AA connection cripple LA no or they wouldn’t have left. People spent months modeling cases not just going off feelings.


No Delta hate here- they’re my usual airline when I travel. I’m just wondering what the implications are for DL with QR influencing the bankruptcy process. It will be interesting to see if DL’s investment is wiped out; wasn’t UA’s investment in AV wiped out early this year before they filed Chapter 11?

The issue here is that DL isn’t in a position to add flights out of MIA. No one is at this point. Now, once demand begins rising, we could see flights added, but I’d have my doubts. If they were serious about having a domestic presence in MIA, they would have began building it up just after the deal.
Last edited by Continental767 on Tue May 26, 2020 12:10 pm, edited 1 time in total.
Indianapolis.
 
onwFan
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Re: LATAM moving towards bankruptcy

Tue May 26, 2020 12:08 pm

Continental767 wrote:
usflyer msp wrote:
Continental767 wrote:
LATAM USA’s social media accounts have announced a Chapter 11 filing.

Bloomberg has picked up the story: https://www.bloomberg.com/news/articles ... -lockdowns

EDIT: added Bloomberg link


I bet heads are exploding in Atlanta. Delta just had their 2b investment wiped out, they are still on the hook for the A350s and OW departure fee, and their arch enemy QR just gained a greater say in how LATAM will be restructured by providing the CH11 financing.


Agreed. The fact that QR has invested in LATAM’s bankruptcy loan means that they have a big say over how the airline is run. We all know how QR feels about DL, so it will be interesting to see what they do. Could we see QR attempt to push them back to AA and other OW partners? Will be interesting to see.

In all honesty, I could see LATAM attempting to get out of this DL deal. Losing the Miami feed from AA was a massive blow- trying to route passengers through Atlanta is not the same as routing them through the gateway to Latin America. A Chapter 11 filing gives the company a chance to rework and renegotiate contrasts with influence from the companies that gave them a bankruptcy loan (QR).

Additionally, with AV Peru dissolving, etc. we are probably going to end up with just one FSC in each country operating long haul routes. I think the chances of a JV between LA and DL being approved are also going down. They will have absolute monopoly on LIM/SCL-JFK/LAX with no chance of a potential competitor entering in the near future... Competition on MIA-LIM also went down.
 
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qf789
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 12:51 pm

LATAM will also return 18 aircraft to lessors effective immediately including 2 A359's, 4 789's, 1 A320 and 11 A321's

Image

https://twitter.com/A350_Production/sta ... 09472?s=20
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a350lover
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 1:18 pm

If DL could drop the deal to integrate LATAM, would that make things easier for them under current circumstances?
 
MIflyer12
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 1:25 pm

Continental767 wrote:
I’m just wondering what the implications are for DL with QR influencing the bankruptcy process. It will be interesting to see if DL’s investment is wiped out; wasn’t UA’s investment in AV wiped out early this year before they filed Chapter 11?


QR really doesn't have much influence on the process in (nor out of) bankruptcy by Chapter 11. It committed debtor-in-possession financing -- that's money that LATAM will use to maintain operations. DIP financing has high priority to be paid back. It's the bankruptcy judge and LATAM management that are running the show. LATAM will present a series of motions (to pay employees, to pay ongoing vendors, probably to incentivize management to stay...) A creditor committee can protest those motions but the path is pretty typical. Management has an exclusive right to present a plan of reorganization and that period of exclusivity can be extended. Prior vendors can't terminate supply nor change prices nor terms of payment. Lease companies can't repossess planes. Airports can't throw them out for non-payment of gate fees... LATAM can terminate leases and contracts without penalty to shrink its cost base. Too many expensive gates at MIA? Here you go, Miami International Airport - not our problem.

IIRC, United just took a write-down of its AV stake (equity? loans?) I don't know if UA wrote off the full value.

In retrospect, this may look like the dumbest $2.25 Billion ($1.9 Billion equity, $350 million in other payments to LATAM) that DL has ever spent. It's hard to see how JV (if approved) profits could conceivably yield a satisfactory return on investment over the next decade.
 
MIflyer12
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 1:28 pm

a350lover wrote:
If DL could drop the deal to integrate LATAM, would that make things easier for them under current circumstances?


DL just agreed not to terminate the (mooted) JV as part of the $62 million 'We don't want your four used A350s' payment. It seems that the equity purchase agreement gave DL a right to terminate a JV -- perhaps in event of change of control or Ch 11 filing.

As part of the new agreement, LATAM gained protection Delta would not use LATAM’s Chapter 11 bankruptcy filing to cancel the joint-venture they signed earlier this month.

“Delta further agreed to not to exercise termination rights…in the event that LATAM were to file for Chapter 11,” LATAM said.


https://www.forbes.com/sites/willhorton ... 1b23033391
 
RCS763AV
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 1:58 pm

Well this is sad. I can also see the Argentina, Paraguay, Ecuador and ultimately Colombia subsidiaries getting scrapped. And about all those preaching MIA feed by AA will be key when things re-open, Latin America - South Florida traffic is almost 100% O/D. Sure, a couple of connections to MSP and CLE don't hurt but it really isn't that important to have a feed partner in MIA for LATAM.

Good luck to those involved in LATAM.
 
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LAXintl
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 2:52 pm

Infographic LATAM published.

Image
Image

https://i.ibb.co/bBky5dx/latam1.png
From the desert to the sea, to all of Southern California
 
2travel2know2
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 4:19 pm

onwFan wrote:
Also long-haul routes of XL and 4M like GYE-JFK and MIA-EZE operated with the odd 1-2 widebody in the entire fleet are probably eliminated. As significant as those routes may be, I doubt if they are worth hanging to with a crisis & bankruptcy looming.
If Chile - Argentina or Brazil-Argentina and Argentina - U.S. bilateral allows LATAM Chile or Brazil 5th liberty between Argentina (most likely EZE) and U.S. (of course MIA), LATAM could well keep EZE-MIA as SCL-EZE-MIA or POA-EZE-MIA.
I'm not on CM's payroll.
 
Detroit313
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 4:47 pm

RCS763AV wrote:
Well this is sad. I can also see the Argentina, Paraguay, Ecuador and ultimately Colombia subsidiaries getting scrapped. And about all those preaching MIA feed by AA will be key when things re-open, Latin America - South Florida traffic is almost 100% O/D. Sure, a couple of connections to MSP and CLE don't hurt but it really isn't that important to have a feed partner in MIA for LATAM.

Good luck to those involved in LATAM.


OK, feed might not be important in MIA as you claim, which in my opinion is very important, but not having to compete with someone who is so big both in MIA and Latin America like AA is, would definitely help.

Now they have no feed and face competition. Before, they had feed and much less competition since they were partners with AA.
 
Westerwaelder
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 4:54 pm

RCS763AV wrote:
Well this is sad. I can also see the Argentina, Paraguay, Ecuador and ultimately Colombia subsidiaries getting scrapped. And about all those preaching MIA feed by AA will be key when things re-open, Latin America - South Florida traffic is almost 100% O/D. Sure, a couple of connections to MSP and CLE don't hurt but it really isn't that important to have a feed partner in MIA for LATAM.

Good luck to those involved in LATAM.


To fill widebodies, at least initially, will require both OD and feed. The more traffic you can combine, the better your LF and your margins. You can control connections and turn them on and off as you need them. Especially in a market where you have competition it's an advantage every hub carrier recognises.
 
usflyer msp
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 5:29 pm

RCS763AV wrote:
Well this is sad. I can also see the Argentina, Paraguay, Ecuador and ultimately Colombia subsidiaries getting scrapped. And about all those preaching MIA feed by AA will be key when things re-open, Latin America - South Florida traffic is almost 100% O/D. Sure, a couple of connections to MSP and CLE don't hurt but it really isn't that important to have a feed partner in MIA for LATAM.

Good luck to those involved in LATAM.


I think LATAM Colombia will be first on the chopping black. It has never been profitable.
LATAM Argentina would be next, even though they are technically not included in the bankruptcy filing. It has been hemorrhaging money and it is hard to compete with an irrational actor in the market like AR.
With the liquidation of TAME, LATAM Ecuador is now solidly the #1 carrier in Ecuador. So I think it is safe.
LATAM Paraguay has been profitable and is not included in the bankruptcy so I doubt it will be wound down.
 
n9801f
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 5:54 pm

This is sad for the people of LATAM. It's a great airline. I hope their reorganization is successful.

MIflyer12 wrote:
Continental767 wrote:
In retrospect, this may look like the dumbest $2.25 Billion ($1.9 Billion equity, $350 million in other payments to LATAM) that DL has ever spent. It's hard to see how JV (if approved) profits could conceivably yield a satisfactory return on investment over the next decade.


Yes, if I were a Delta shareholder, I would not be amused.

Or an employee who lost his/her job. Or a US taxpayer.

"Wait, what happened to $2.3B?"
 
pipeafcr
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 6:26 pm

usflyer msp wrote:
RCS763AV wrote:
Well this is sad. I can also see the Argentina, Paraguay, Ecuador and ultimately Colombia subsidiaries getting scrapped. And about all those preaching MIA feed by AA will be key when things re-open, Latin America - South Florida traffic is almost 100% O/D. Sure, a couple of connections to MSP and CLE don't hurt but it really isn't that important to have a feed partner in MIA for LATAM.

Good luck to those involved in LATAM.


I think LATAM Colombia will be first on the chopping black. It has never been profitable.
LATAM Argentina would be next, even though they are technically not included in the bankruptcy filing. It has been hemorrhaging money and it is hard to compete with an irrational actor in the market like AR.
With the liquidation of TAME, LATAM Ecuador is now solidly the #1 carrier in Ecuador. So I think it is safe.
LATAM Paraguay has been profitable and is not included in the bankruptcy so I doubt it will be wound down.


I concur about LATAM Colombia being the first one to go, especially since the Colombian Government has banned international flying at least until September and domestic flying until July. LATAM Ecuador is also starting operations again in June so that's another + for them. I, however, think that LATAM Argentina will be alright.
Felipe Carrillo
 
OB1504
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 6:31 pm

MIflyer12 wrote:
QR really doesn't have much influence on the process in (nor out of) bankruptcy by Chapter 11. It committed debtor-in-possession financing -- that's money that LATAM will use to maintain operations. DIP financing has high priority to be paid back. It's the bankruptcy judge and LATAM management that are running the show. LATAM will present a series of motions (to pay employees, to pay ongoing vendors, probably to incentivize management to stay...) A creditor committee can protest those motions but the path is pretty typical. Management has an exclusive right to present a plan of reorganization and that period of exclusivity can be extended. Prior vendors can't terminate supply nor change prices nor terms of payment. Lease companies can't repossess planes. Airports can't throw them out for non-payment of gate fees... LATAM can terminate leases and contracts without penalty to shrink its cost base. Too many expensive gates at MIA? Here you go, Miami International Airport - not our problem.


LATAM has no gates at MIA. No one does. It’s entirely common use. Only AA and DL even get preferential use.

That being said, they do have a hangar and cargo warehouse, but I don’t see them ditching the cargo facilities if it’s one of the only things helping them stay afloat right now.

n9801f wrote:
This is sad for the people of LATAM. It's a great airline. I hope their reorganization is successful.

MIflyer12 wrote:
Continental767 wrote:
In retrospect, this may look like the dumbest $2.25 Billion ($1.9 Billion equity, $350 million in other payments to LATAM) that DL has ever spent. It's hard to see how JV (if approved) profits could conceivably yield a satisfactory return on investment over the next decade.


Yes, if I were a Delta shareholder, I would not be amused.

Or an employee who lost his/her job. Or a US taxpayer.

"Wait, what happened to $2.3B?"


It was a brilliant move at the time. No one could’ve foreseen the pandemic coming back in October.

With that logic, any major expense any airline undertook in 2019 can be seen as dumb.
 
dcajet
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 7:03 pm

onwFan wrote:
tphuang wrote:
Can we actually get to the implications of these filings rather than how DL and AA again?

Does this mean they are cutting certain subsidiaries? I'm not really sure the implications here. Even if the chapter 11 saves their US subsidiary, what can they do about their other countries' subsidiaries?

I have a feeling that LATAM Argentina is a goner (for obvious reasons). LA Chile, Brazil & Peru are their core units and they will try to keep them. I don’t think LA Colombia or Ecuador are their priority either (especially since they cut all routes even to MIA and MAD from these hubs). Focus on a three-way hub system around LIM, SCL and GRU. Not even all the routes from there might stay. Also long-haul routes of XL and 4M like GYE-JFK and MIA-EZE operated with the odd 1-2 widebody in the entire fleet are probably eliminated. As significant as those routes may be, I doubt if they are worth hanging to with a crisis & bankruptcy looming.


LATAM no longer has (had) dedicated 767s to fly EZE-MIA & EZE-GRU. They rotate thru the system either at MIA or GRU with other of the group's subsidiaries and all are CC- registered. The only dedicated fleets are the domestic A320s at Argentina and most of the Brazil fleet.
Keep calm and wash your hands.
 
n9801f
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 7:23 pm

OB1504 wrote:

With that logic, any major expense any airline undertook in 2019 can be seen as dumb.


No. What’s different here is that the asset bought (LATAM shares) likely ceases to exist.

Other investments such as airplanes would see a temporary drop in value but would at least still remain possessions of Delta.

So the $2.3B may be gone with little in return.
 
dcajet
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 7:32 pm

2travel2know2 wrote:
onwFan wrote:
Also long-haul routes of XL and 4M like GYE-JFK and MIA-EZE operated with the odd 1-2 widebody in the entire fleet are probably eliminated. As significant as those routes may be, I doubt if they are worth hanging to with a crisis & bankruptcy looming.
If Chile - Argentina or Brazil-Argentina and Argentina - U.S. bilateral allows LATAM Chile or Brazil 5th liberty between Argentina (most likely EZE) and U.S. (of course MIA), LATAM could well keep EZE-MIA as SCL-EZE-MIA or POA-EZE-MIA.


Yes they do. In fact LATAM Brazil operates daily GRU-EZE-LIM and SCL-COR-GRU rotations. It used to operate GRU-EZE-BOG up to 2019. LATAM Paraguy (the ex LAP/TAM Mercosur) operates ASU-EZE-GIG flights and ASU-EZE-FLN.
Keep calm and wash your hands.
 
dcajet
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 7:43 pm

pipeafcr wrote:
usflyer msp wrote:
RCS763AV wrote:
Well this is sad. I can also see the Argentina, Paraguay, Ecuador and ultimately Colombia subsidiaries getting scrapped. And about all those preaching MIA feed by AA will be key when things re-open, Latin America - South Florida traffic is almost 100% O/D. Sure, a couple of connections to MSP and CLE don't hurt but it really isn't that important to have a feed partner in MIA for LATAM.

Good luck to those involved in LATAM.


I think LATAM Colombia will be first on the chopping black. It has never been profitable.
LATAM Argentina would be next, even though they are technically not included in the bankruptcy filing. It has been hemorrhaging money and it is hard to compete with an irrational actor in the market like AR.
With the liquidation of TAME, LATAM Ecuador is now solidly the #1 carrier in Ecuador. So I think it is safe.
LATAM Paraguay has been profitable and is not included in the bankruptcy so I doubt it will be wound down.


I concur about LATAM Colombia being the first one to go, especially since the Colombian Government has banned international flying at least until September and domestic flying until July. LATAM Ecuador is also starting operations again in June so that's another + for them. I, however, think that LATAM Argentina will be alright.


Argentina is the 3rd largest market for LATAM, but its proximity to Chile & Brazil and liberal bilaterals make it easy to serve with the other subsidiaries. The domestic network just serves the high traffic airports (MDZ, NQN, COR, TUC, SLA) and the tourist destinations (USH, SLA, IGR, BRC) that LA feeds with its international flights. With Argentina being the #1 country in the continent in terms of international visitors, it makes sense for LATAM to keep the operation running. But a renewed and predatory AR, with the Fernandez/Kirchner team fully behind it and the power of the state, does not make it easy for LA.
Keep calm and wash your hands.
 
Detroit313
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 8:17 pm

Good for QATAR. They will call the shots.
 
Boof02671
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 9:39 pm

Here is an interesting article about stock and what happens without in bankruptcy, basically worthless and Delta will lose their $1.9 billion investment and is forbidden to invest by the CARES Act.
 
777Mech
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 9:50 pm

Detroit313 wrote:
Good for QATAR. They will call the shots.


Qatar isn't the sole entity backing bankruptcy loans. Your obsession with this on this thread shows you clearly have an axe to grind.

I'm still convinced this is really KLM617.
 
FSDan
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 10:00 pm

Detroit313 wrote:
RCS763AV wrote:
Well this is sad. I can also see the Argentina, Paraguay, Ecuador and ultimately Colombia subsidiaries getting scrapped. And about all those preaching MIA feed by AA will be key when things re-open, Latin America - South Florida traffic is almost 100% O/D. Sure, a couple of connections to MSP and CLE don't hurt but it really isn't that important to have a feed partner in MIA for LATAM.

Good luck to those involved in LATAM.


OK, feed might not be important in MIA as you claim, which in my opinion is very important, but not having to compete with someone who is so big both in MIA and Latin America like AA is, would definitely help.

Now they have no feed and face competition. Before, they had feed and much less competition since they were partners with AA.


Since the AA-LA JV was struck down, AA and LA were going to remain competitors regardless of alliance alignment. Just because they codeshared on some of each other's flights, doesn't mean they weren't competing for the same traffic. Unless there's a JV, you can't coordinate schedules and prices, so AA and LA would have continued stepping on each other's toes on the most important U.S.-South America routes.
This is my signature until I think of a better one.
 
onwFan
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 10:21 pm

Whatever be the case, is a JV with DL the answer to LA’s path out of bankruptcy? A lengthy process, requiring requlatory approval from multiple countries, all of whom are still grappling with the repercussions of covid? With carriers collapsing every month, there is no clear picture of the competitive landscape for the forseeable future. That means the process will take even longer. What is better for LATAM? Partner with DL and fight AA (or) partner with AA and fight DL?
 
MSPNWA
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 10:36 pm

FSDan wrote:
Since the AA-LA JV was struck down, AA and LA were going to remain competitors regardless of alliance alignment. Just because they codeshared on some of each other's flights, doesn't mean they weren't competing for the same traffic. Unless there's a JV, you can't coordinate schedules and prices, so AA and LA would have continued stepping on each other's toes on the most important U.S.-South America routes.


There's a difference between being a competitor and being a "competitor". You have to be pretty naive to think that partners without a JV compete with each other on the same level as airlines without any partnership at all. Case in point? AA and LATAM both immediately increasing their MIA-South America capacity once LATAM jumped ship.
Last edited by MSPNWA on Tue May 26, 2020 10:37 pm, edited 1 time in total.
 
TYWoolman
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 10:36 pm

MIflyer12 wrote:
a350lover wrote:
If DL could drop the deal to integrate LATAM, would that make things easier for them under current circumstances?


DL just agreed not to terminate the (mooted) JV as part of the $62 million 'We don't want your four used A350s' payment. It seems that the equity purchase agreement gave DL a right to terminate a JV -- perhaps in event of change of control or Ch 11 filing.

As part of the new agreement, LATAM gained protection Delta would not use LATAM’s Chapter 11 bankruptcy filing to cancel the joint-venture they signed earlier this month.

“Delta further agreed to not to exercise termination rights…in the event that LATAM were to file for Chapter 11,” LATAM said.


https://www.forbes.com/sites/willhorton ... 1b23033391


It's nice that Delta agreed to not to exercise termination rights, but it shows Delta's desperation here more than LATAM's as LATAM's commitment is everything but guaranteed in the future. Hopefully LATAM is not using Delta for just long enough time to gain a recovery plan under new management perhaps only to then entertain competing offers from, say, American (?)
 
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lightsaber
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 10:40 pm

TYWoolman wrote:
MIflyer12 wrote:
a350lover wrote:
If DL could drop the deal to integrate LATAM, would that make things easier for them under current circumstances?


DL just agreed not to terminate the (mooted) JV as part of the $62 million 'We don't want your four used A350s' payment. It seems that the equity purchase agreement gave DL a right to terminate a JV -- perhaps in event of change of control or Ch 11 filing.

As part of the new agreement, LATAM gained protection Delta would not use LATAM’s Chapter 11 bankruptcy filing to cancel the joint-venture they signed earlier this month.

“Delta further agreed to not to exercise termination rights…in the event that LATAM were to file for Chapter 11,” LATAM said.


https://www.forbes.com/sites/willhorton ... 1b23033391


It's nice that Delta agreed to not to exercise termination rights, but it shows Delta's desperation here more than LATAM's as LATAM's commitment is everything but guaranteed in the future. Hopefully LATAM is not using Delta for just long enough time to gain a recovery plan under new management perhaps only to then entertain competing offers from, say, American (?)

LATAM is an opportunity for Delta.

AA and LATAM not being allowed a JV started a problem for LATAM.

In the long run, a JV benefits LATAM. Getting to the long run is the current issue. It could be with UA or Delta.

Lightsaber
IM messages to mods on warnings and bans will be ignored and nasty ones will result in a ban.
 
TYWoolman
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 10:48 pm

lightsaber wrote:
TYWoolman wrote:
MIflyer12 wrote:

DL just agreed not to terminate the (mooted) JV as part of the $62 million 'We don't want your four used A350s' payment. It seems that the equity purchase agreement gave DL a right to terminate a JV -- perhaps in event of change of control or Ch 11 filing.

As part of the new agreement, LATAM gained protection Delta would not use LATAM’s Chapter 11 bankruptcy filing to cancel the joint-venture they signed earlier this month.

“Delta further agreed to not to exercise termination rights…in the event that LATAM were to file for Chapter 11,” LATAM said.


https://www.forbes.com/sites/willhorton ... 1b23033391


It's nice that Delta agreed to not to exercise termination rights, but it shows Delta's desperation here more than LATAM's as LATAM's commitment is everything but guaranteed in the future. Hopefully LATAM is not using Delta for just long enough time to gain a recovery plan under new management perhaps only to then entertain competing offers from, say, American (?)

LATAM is an opportunity for Delta.

AA and LATAM not being allowed a JV started a problem for LATAM.

In the long run, a JV benefits LATAM. Getting to the long run is the current issue. It could be with UA or Delta.

Lightsaber


Agreed. But a post-covid South America-U.S. marketplace may be different enough for governments (Chile) to have different perspectives, perhaps more protectionist. American still in the game. And bankruptcy is the new dynamic here.
 
MIflyer12
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 10:58 pm

onwFan wrote:
Whatever be the case, is a JV with DL the answer to LA’s path out of bankruptcy? A lengthy process, requiring requlatory approval from multiple countries, all of whom are still grappling with the repercussions of covid? With carriers collapsing every month, there is no clear picture of the competitive landscape for the forseeable future. That means the process will take even longer. What is better for LATAM? Partner with DL and fight AA (or) partner with AA and fight DL?


Partner with AA? AA and LATAM could have offered modifications to their JV proposal sufficient to gain antitrust approval, and chose not to.

You're trading in fantasy - an AA/LATAM proposal that never got filed, let alone approved.

Today's transaction is a simple one and clearly signaled: LATAM decided it wanted to get DL's $62 million, keep its four A350s and DL JV, instead of selling the A350s and risking DL terminating the JV.
 
onwFan
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Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 11:02 pm

MIflyer12 wrote:
Today's transaction is a simple one and clearly signaled: LATAM decided it wanted to get DL's $62 million, keep its four A350s and DL JV, instead of selling the A350s and risking DL terminating the JV.

Lol - That is an intelligent spin on DL backing out of their contract for the A350s!
 
FSDan
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Joined: Mon Jan 03, 2011 5:27 pm

Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 11:07 pm

MSPNWA wrote:
FSDan wrote:
Since the AA-LA JV was struck down, AA and LA were going to remain competitors regardless of alliance alignment. Just because they codeshared on some of each other's flights, doesn't mean they weren't competing for the same traffic. Unless there's a JV, you can't coordinate schedules and prices, so AA and LA would have continued stepping on each other's toes on the most important U.S.-South America routes.


There's a difference between being a competitor and being a "competitor". You have to be pretty naive to think that partners without a JV compete with each other on the same level as airlines without any partnership at all. Case in point? AA and LATAM both immediately increasing their MIA-South America capacity once LATAM jumped ship.


LA leaving OneWorld might have ratcheted the competition up a notch (mostly from AA's side; I don't remember LA adding much capacity...), but AA and LA certainly were competitors before. I remember seeing AA nonstop flights being listed way below a bunch of connecting LA itineraries on Latam's booking engine when searching in the past, and I also don't recall seeing Latam flights displayed prominently on AA's site. In important business markets like GRU-MIA and GRU-JFK, don't you think that both carriers wanted the same high value traffic? A given passenger could choose between LA and AA and it might not have made too much difference to them based on FF point accrual or lounge access, but to the airlines it definitely mattered which carrier was chosen.
This is my signature until I think of a better one.
 
MSPNWA
Posts: 3698
Joined: Thu Apr 23, 2009 2:48 am

Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 11:19 pm

FSDan wrote:
LA leaving OneWorld might have ratcheted the competition up a notch (mostly from AA's side; I don't remember LA adding much capacity...), but AA and LA certainly were competitors before. I remember seeing AA nonstop flights being listed way below a bunch of connecting LA itineraries on Latam's booking engine when searching in the past, and I also don't recall seeing Latam flights displayed prominently on AA's site. In important business markets like GRU-MIA and GRU-JFK, don't you think that both carriers wanted the same high value traffic? A given passenger could choose between LA and AA and it might not have made too much difference to them based on FF point accrual or lounge access, but to the airlines it definitely mattered which carrier was chosen.


No one is saying there wasn't some level of competition. Obviously their was some competition without a JV. But again, look at it from just one example. Why in the world would both AA and LATAM immediately increase capacity after the partnership ended unless they viewed their "competition" differently without the partnership? It wasn't some magical increase in demand. Clearly they see themselves as heightened competitors, a level of competition different from before. That reduced level of competition is a significant asset that LATAM lost, and now their MIA replacement won't be in position to cover. They're in a tough position to recover.
 
FSDan
Posts: 3281
Joined: Mon Jan 03, 2011 5:27 pm

Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 11:30 pm

MSPNWA wrote:
FSDan wrote:
LA leaving OneWorld might have ratcheted the competition up a notch (mostly from AA's side; I don't remember LA adding much capacity...), but AA and LA certainly were competitors before. I remember seeing AA nonstop flights being listed way below a bunch of connecting LA itineraries on Latam's booking engine when searching in the past, and I also don't recall seeing Latam flights displayed prominently on AA's site. In important business markets like GRU-MIA and GRU-JFK, don't you think that both carriers wanted the same high value traffic? A given passenger could choose between LA and AA and it might not have made too much difference to them based on FF point accrual or lounge access, but to the airlines it definitely mattered which carrier was chosen.


No one is saying there wasn't some level of competition.


It was implied pretty strongly. A quote from the poster I was replying to:

"not having to compete with someone who is so big both in MIA and Latin America like AA is, would definitely help.

Now they have no feed and face competition. Before, they had feed and much less competition since they were partners with AA."

MSPNWA wrote:
Why in the world would both AA and LATAM immediately increase capacity after the partnership ended unless they viewed their "competition" differently without the partnership?


Again, I don't remember LA materially increasing capacity. In which markets did they announced increased service, and how big of an increase? AA did announce added capacity in a few markets (most of which were merely increases to levels they've flown in the recent past such as 3x daily on MIA-GRU), but that might have been as much to send a message that they aren't going to back down in the region as anything else.
This is my signature until I think of a better one.
 
onwFan
Posts: 433
Joined: Wed Feb 03, 2016 4:02 am

Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 11:37 pm

FSDan wrote:
MSPNWA wrote:
FSDan wrote:
LA leaving OneWorld might have ratcheted the competition up a notch (mostly from AA's side; I don't remember LA adding much capacity...), but AA and LA certainly were competitors before. I remember seeing AA nonstop flights being listed way below a bunch of connecting LA itineraries on Latam's booking engine when searching in the past, and I also don't recall seeing Latam flights displayed prominently on AA's site. In important business markets like GRU-MIA and GRU-JFK, don't you think that both carriers wanted the same high value traffic? A given passenger could choose between LA and AA and it might not have made too much difference to them based on FF point accrual or lounge access, but to the airlines it definitely mattered which carrier was chosen.


No one is saying there wasn't some level of competition.


It was implied pretty strongly. A quote from the poster I was replying to:

"not having to compete with someone who is so big both in MIA and Latin America like AA is, would definitely help.

Now they have no feed and face competition. Before, they had feed and much less competition since they were partners with AA."

MSPNWA wrote:
Why in the world would both AA and LATAM immediately increase capacity after the partnership ended unless they viewed their "competition" differently without the partnership?


Again, I don't remember LA materially increasing capacity. In which markets did they announced increased service, and how big of an increase? AA did announce added capacity in a few markets (most of which were merely increases to levels they've flown in the recent past such as 3x daily on MIA-GRU), but that might have been as much to send a message that they aren't going to back down in the region as anything else.

LA added an extra daily LIM-MIA on B767 and upped LAX-SCL to daily. These are just what I remember. I remember everyone discussing how those frequency increases were unsustainable...

Edit: LA was also planning to up SCL-JFK to 10x weekly from Apr. Given covid, no idea whether any of these actually went into effect.
 
FSDan
Posts: 3281
Joined: Mon Jan 03, 2011 5:27 pm

Re: Updated: LATAM files for Bankruptcy

Tue May 26, 2020 11:57 pm

onwFan wrote:
FSDan wrote:
MSPNWA wrote:

No one is saying there wasn't some level of competition.


It was implied pretty strongly. A quote from the poster I was replying to:

"not having to compete with someone who is so big both in MIA and Latin America like AA is, would definitely help.

Now they have no feed and face competition. Before, they had feed and much less competition since they were partners with AA."

MSPNWA wrote:
Why in the world would both AA and LATAM immediately increase capacity after the partnership ended unless they viewed their "competition" differently without the partnership?


Again, I don't remember LA materially increasing capacity. In which markets did they announced increased service, and how big of an increase? AA did announce added capacity in a few markets (most of which were merely increases to levels they've flown in the recent past such as 3x daily on MIA-GRU), but that might have been as much to send a message that they aren't going to back down in the region as anything else.

LA added an extra daily LIM-MIA on B767 and upped LAX-SCL to daily. These are just what I remember. I remember everyone discussing how those frequency increases were unsustainable...

Edit: LA was also planning to up SCL-JFK to 10x weekly from Apr. Given covid, no idea whether any of these actually went into effect.


Of those, only LIM-MIA would possibly be a reaction to changed competitive dynamics with AA. LA has SCL-LAX and SCL-JFK to themselves, and has done for a while.
This is my signature until I think of a better one.
 
dcajet
Posts: 4654
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Re: Updated: LATAM files for Bankruptcy

Wed May 27, 2020 4:54 am

Things are not looking good at LATAM Argentina. The airline has still not paid the April 2020 salaries in their entirety and has been warned by Argentina's Ministry of Labor it needs to do so. The airline says it has lost money for the past 4 years, blaming the deregulation of the local market and devaluation of the peso. LATAM's head office used to cover those losses but it can no longer afford to do so, according to the airline.

Image

Image
Keep calm and wash your hands.
 
MSPNWA
Posts: 3698
Joined: Thu Apr 23, 2009 2:48 am

Re: Updated: LATAM files for Bankruptcy

Wed May 27, 2020 5:50 am

FSDan wrote:
It was implied pretty strongly. A quote from the poster I was replying to:

"not having to compete with someone who is so big both in MIA and Latin America like AA is, would definitely help.

Now they have no feed and face competition. Before, they had feed and much less competition since they were partners with AA."


That's the way I took that post. I see now you didn't. However I certainly didn't imply it in my post, so to respond to my post as if I did can be nothing more than an evasion. And now you're arguing with me over another poster's words? I see that post one way. You see it another. Who cares. How about just acknowledging that "stepping on each other's toes" along with the other language implying a highly competitive environment wasn't a good illustration of the "competition" under the OW partnership. Now that the partnership is over, we were going to see what stepping on toes is really like.

FSDan wrote:
Again, I don't remember LA materially increasing capacity. In which markets did they announced increased service, and how big of an increase? AA did announce added capacity in a few markets (most of which were merely increases to levels they've flown in the recent past such as 3x daily on MIA-GRU), but that might have been as much to send a message that they aren't going to back down in the region as anything else.


I see you've already been reminded. Don't downplay the actions of AA and LATAM. Unless you believe it's one crazy coincidence that both carriers acted immediately after the partnership ended, the level of competition had to have changed. It proves the point that there's differing levels of competitiveness between airlines outside of a JV, and to imply otherwise isn't supported in real life.
 
onwFan
Posts: 433
Joined: Wed Feb 03, 2016 4:02 am

Re: Updated: LATAM files for Bankruptcy

Wed May 27, 2020 3:43 pm

dcajet wrote:
Things are not looking good at LATAM Argentina. The airline has still not paid the April 2020 salaries in their entirety and has been warned by Argentina's Ministry of Labor it needs to do so. The airline says it has lost money for the past 4 years, blaming the deregulation of the local market and devaluation of the peso. LATAM's head office used to cover those losses but it can no longer afford to do so, according to the airline.

Image

Image

Doesn’t this raise the question of why the Argentinian subsidiary was not included in the current bankruptcy filing?
1. Will this be dealt in a separate filing in Argentina - I don’t know the legality of how/which carriers are eligible to file for bankruptcy in the US (or)
2. Are they expecting funds from the Argentine govt? (or)
3. Does it suggest are they not keen on pursuing this venture any further?
 
United1
Posts: 4160
Joined: Wed Oct 08, 2003 9:21 am

Re: Updated: LATAM files for Bankruptcy

Wed May 27, 2020 4:29 pm

Continental767 wrote:

No Delta hate here- they’re my usual airline when I travel. I’m just wondering what the implications are for DL with QR influencing the bankruptcy process. It will be interesting to see if DL’s investment is wiped out; wasn’t UA’s investment in AV wiped out early this year before they filed Chapter 11?


UA wrote down the investment in AV to basically nothing after AV filed for BK. There are accounting rules that required them to do that. UA still owns the investment though and might end up with some sort of equity when/IF AV emerges from BK. DL will end up doing the same, probably this quarter, but much like UA might end up with some level of equity when LA emerges.
I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
 
usflyer msp
Posts: 3722
Joined: Tue May 23, 2000 11:50 am

Re: Updated: LATAM files for Bankruptcy

Wed May 27, 2020 5:05 pm

onwFan wrote:
dcajet wrote:
Things are not looking good at LATAM Argentina. The airline has still not paid the April 2020 salaries in their entirety and has been warned by Argentina's Ministry of Labor it needs to do so. The airline says it has lost money for the past 4 years, blaming the deregulation of the local market and devaluation of the peso. LATAM's head office used to cover those losses but it can no longer afford to do so, according to the airline.

Image

Image

Doesn’t this raise the question of why the Argentinian subsidiary was not included in the current bankruptcy filing?
1. Will this be dealt in a separate filing in Argentina - I don’t know the legality of how/which carriers are eligible to file for bankruptcy in the US (or)
2. Are they expecting funds from the Argentine govt? (or)
3. Does it suggest are they not keen on pursuing this venture any further?


I think the back wages are the complication. Under US Law, the employees would become unsecured creditors and LATAM would need court permission to make them whole while under Argentine law the employees have to paid. I suspect LATAM Argentina may be added to the filing once the wage situation is resolved.
 
FSDan
Posts: 3281
Joined: Mon Jan 03, 2011 5:27 pm

Re: Updated: LATAM files for Bankruptcy

Wed May 27, 2020 5:41 pm

MSPNWA wrote:
FSDan wrote:
It was implied pretty strongly. A quote from the poster I was replying to:

"not having to compete with someone who is so big both in MIA and Latin America like AA is, would definitely help.

Now they have no feed and face competition. Before, they had feed and much less competition since they were partners with AA."


That's the way I took that post. I see now you didn't. However I certainly didn't imply it in my post, so to respond to my post as if I did can be nothing more than an evasion. And now you're arguing with me over another poster's words? I see that post one way. You see it another. Who cares. How about just acknowledging that "stepping on each other's toes" along with the other language implying a highly competitive environment wasn't a good illustration of the "competition" under the OW partnership. Now that the partnership is over, we were going to see what stepping on toes is really like.


You jumped into this conversation - I was merely explaining why I decided to respond to the original insinuation that AA and LA weren't competitors while in OneWorld. If you can explain to me how they were legally working together on routes like MIA-LIM and MIA-SCL, I'm all ears. And if their partnership was working so well for them as it was, I'm not sure why they were seeking a JV, and why Latam turned to DL as soon at that JV didn't work out.

I've made no assertions that there aren't varying levels of competition between airlines. If you see "stepping on each other's toes" as strong language implying a "highly competitive environment", or you don't see that language as fitting to describe an environment where two airlines that aren't legally allowed to work together on key details like frequencies, timings, and pricing both fly many of the same key routes, then I don't know what softer language I should have used...
This is my signature until I think of a better one.
 
argentinevol98
Posts: 164
Joined: Mon Jan 20, 2020 9:40 pm

Re: Updated: LATAM files for Bankruptcy

Wed May 27, 2020 6:44 pm

onwFan wrote:
dcajet wrote:
Things are not looking good at LATAM Argentina. The airline has still not paid the April 2020 salaries in their entirety and has been warned by Argentina's Ministry of Labor it needs to do so. The airline says it has lost money for the past 4 years, blaming the deregulation of the local market and devaluation of the peso. LATAM's head office used to cover those losses but it can no longer afford to do so, according to the airline.

Image

Image

Doesn’t this raise the question of why the Argentinian subsidiary was not included in the current bankruptcy filing?
1. Will this be dealt in a separate filing in Argentina - I don’t know the legality of how/which carriers are eligible to file for bankruptcy in the US (or)
2. Are they expecting funds from the Argentine govt? (or)
3. Does it suggest are they not keen on pursuing this venture any further?


There is no way LATAM will receive money from the government. The current government will frankly be glad to see LATAM gone if that ends up being the case and, if anything, will try to expedite the process. The government will do what it can to prop up AR indefinitely which includes letting competition die. AR is of high political importance to the peronista-kirchneristas for multiple reasons and they have political incentives to damage LATAM. Anyway, even before that part becomes relevant is the fact that the country is on the verge of default (imo it is inevitable at this stage) so there isn't money to hand out anyway. What little is available for the airline industry will go entirely to AR (and Austral).
"He sospechado alguna vez que la única cosa sin misterio es la felicidad, porque se justifica por sí sola"-Jorge Luis Borges
 
dcajet
Posts: 4654
Joined: Sun Aug 01, 2004 9:31 am

Re: Updated: LATAM files for Bankruptcy

Wed May 27, 2020 7:04 pm

argentinevol98 wrote:
onwFan wrote:
dcajet wrote:
Things are not looking good at LATAM Argentina. The airline has still not paid the April 2020 salaries in their entirety and has been warned by Argentina's Ministry of Labor it needs to do so. The airline says it has lost money for the past 4 years, blaming the deregulation of the local market and devaluation of the peso. LATAM's head office used to cover those losses but it can no longer afford to do so, according to the airline.

Image

Image

Doesn’t this raise the question of why the Argentinian subsidiary was not included in the current bankruptcy filing?
1. Will this be dealt in a separate filing in Argentina - I don’t know the legality of how/which carriers are eligible to file for bankruptcy in the US (or)
2. Are they expecting funds from the Argentine govt? (or)
3. Does it suggest are they not keen on pursuing this venture any further?


There is no way LATAM will receive money from the government. The current government will frankly be glad to see LATAM gone if that ends up being the case and, if anything, will try to expedite the process. The government will do what it can to prop up AR indefinitely which includes letting competition die. AR is of high political importance to the peronista-kirchneristas for multiple reasons and they have political incentives to damage LATAM. Anyway, even before that part becomes relevant is the fact that the country is on the verge of default (imo it is inevitable at this stage) so there isn't money to hand out anyway. What little is available for the airline industry will go entirely to AR (and Austral).


Well said. There have been some meetings between the government and the private airllines, but they went nowhere; some of the participants mentioned ill will on part of the government. Some also see the ban on ticket sales and airline activity until Sept. 1st as yet another sign that the government is trying to choke all local competition to AR.

It is not exactly clear as to why Argentina and Brazil were not included in the bankruptcy filing at this time. Some speculate these two countries have their own legal processes for such cases and the fact that LATAM Brazil is getting a rescue package from the BNDES (Brazil's National Development Bank). One thing is sure, LATAM Argentina is not getting a penny and in the far fetched case it would, the government would most likely demand a % of the airline in return. Not a palatable scenario for LATAM.
Keep calm and wash your hands.
 
pipeafcr
Posts: 430
Joined: Sat Jun 13, 2009 1:47 am

Re: Updated: LATAM files for Bankruptcy

Wed May 27, 2020 11:15 pm

usflyer msp wrote:
RCS763AV wrote:
Well this is sad. I can also see the Argentina, Paraguay, Ecuador and ultimately Colombia subsidiaries getting scrapped. And about all those preaching MIA feed by AA will be key when things re-open, Latin America - South Florida traffic is almost 100% O/D. Sure, a couple of connections to MSP and CLE don't hurt but it really isn't that important to have a feed partner in MIA for LATAM.

Good luck to those involved in LATAM.


I think LATAM Colombia will be first on the chopping black. It has never been profitable.
LATAM Argentina would be next, even though they are technically not included in the bankruptcy filing. It has been hemorrhaging money and it is hard to compete with an irrational actor in the market like AR.
With the liquidation of TAME, LATAM Ecuador is now solidly the #1 carrier in Ecuador. So I think it is safe.
LATAM Paraguay has been profitable and is not included in the bankruptcy so I doubt it will be wound down.


The Colombian Government has announced that it will serve as a lender for Colombian based airlines including Avianca and LATAM, therefore we may actually see LATAM Colombia sticking around to survive off of Colombian taxpayers.
Felipe Carrillo
 
enplaned
Posts: 84
Joined: Mon Aug 29, 2016 9:49 pm

Re: Updated: LATAM files for Bankruptcy

Thu May 28, 2020 2:01 am

qf789 wrote:
LATAM will also return 18 aircraft to lessors effective immediately including 2 A359's, 4 789's, 1 A320 and 11 A321's

https://twitter.com/A350_Production/sta ... 09472?s=20


All but two of those aircraft were in a EETC - i.e. debt financed (though it's possible that in the meantime LATAM sold the associated equity). So, these were not (originally) leased, but debt-financed.

My guess is they were rejected because (1) LATAM wants to shrink and (2) because these are backed by bond-holders, it would be a lot harder to negotiate concessions for these aircraft than others. There are many parties across the table, not just one lessor.

These were backed by what was considered at the time to be excellent collateral, and yet there may well be less than full recovery for the bond-holders. My guess is this will cause quite a ripple in the EETC market.

EETC = Enhanced Equipment Trust Certificate.

An ETC is simply a bond backed by aircraft collateral, and paid off by payments on the aircraft. It's "Enhanced" because it will have some form of liquidity support to provide up to (probably) 18 months of interest (but not principal payment) while the aircraft are remarketed. In other words, a bank is on the hook to provide that interest support (to later be recovered from selling off the aircraft).

A321CEOs were pretty hot properties pre-Covid, presumably less so now. A350s and 787s were already softer pre-Covid than narrowbodies, and the widebody market is clearly going to be more badly hurt for longer due to Covid.
 
strfyr51
Posts: 4905
Joined: Tue Apr 10, 2012 5:04 pm

Re: LATAM moving towards bankruptcy

Thu May 28, 2020 2:27 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.

It might require a change in Delta's operating scheme. You want to fly there? Fly it your Damn Self! I'd bet they'll find no squawk from their flight and cabin Crews.
But it will take some real work from their management staff.
 
strfyr51
Posts: 4905
Joined: Tue Apr 10, 2012 5:04 pm

Re: LATAM moving towards bankruptcy

Thu May 28, 2020 2:41 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.

No? I don't think he has an Anti Delta thing. Delta as been continuously seeking surrogates to fly routes they didn't want to fly themselves when they clearly could have gone to all the places they sought to Sell tickets. It's clearly known that Delta is risk averse. And that's not a bad thing as long as everything Else is cool, But Right now? Everything Else isn't cool and Might or might NOT be cool in the future Near or Extended. Delta's model is a fair weather model with Low risk and High returns on Minimal effort. However? The weather is Not "Fair" In case you haven't been looking? the weather for the airlines is pretty damn Overcast with clouds on the Horizon.
Nobody knows yet if it's rain, thunderstorms Hurricanes or Tornados to come. or? what may befall Delta's surrogates. It'll be a damn good story though. I can't wait to see the last chapter. This will make Business School reading pretty interesting in the near future. Whattaya think?
 
Kikko19
Posts: 679
Joined: Sat Apr 22, 2017 4:45 pm

Re: Updated: LATAM files for Bankruptcy

Thu May 28, 2020 7:44 am

What about Europe? does Latam has lot of traffic? who's winning the most with their demise? LH? IB? AF? AZ?
 
Jomar777
Posts: 554
Joined: Tue Oct 20, 2015 8:45 am

Re: LATAM moving towards bankruptcy

Thu May 28, 2020 10:16 am

volks92 wrote:
Mortyman wrote:
I am surprised that LATAM does not have stronger legs to stand on and surprised that the governments does not seem to be willing to help out. LATAM is the biggest South American airline. If that one is not capable of surviving, who is in South America ?

The Brazilian government laid out a R$ 2 bi rescue package for LATAM a couple of weeks ago, to which they agreed to:

https://translate.google.ca/translate?s ... z-bndes%2F


I suppose that this covers LATAM Brasil only, isn't it? Maybe that's why only the Chilean arm went for Chapter 11 in US- not the Brazilian arm. In fact, if you look deeper and pre-merger, you would see that LAN Chile (and subsidiaries) went for Chapter 11 and that TAM (and their subsidiaries) stayed afloat (at least for now...).

I see above in one of the threads that LATAM Brasil is the best performing in the group...

Am I reading this right?
 
Jomar777
Posts: 554
Joined: Tue Oct 20, 2015 8:45 am

Re: Updated: LATAM files for Bankruptcy

Thu May 28, 2020 10:41 am

The LATAM/AA JV was agreed apparently by the Brazilian Government but the Chilean one threw a spanner on it. Then it approved the JV with Delta.

The Brazilian Government seems to have provided a rescue package for LATAM (Brasil only... I presume...) but the Chilean Government did nothing so far.

DL has not helped on the situation (as they did (not) with VS in the UK) but QR is providing support.

LATAM (Chile and... let's say... their subsidiaries) applied for Chapter 11 in the US but LATAM (Brasil and... again... let's say... their subsidiaries) hav stayed out of it.

No complaints or critics but it does seem that LATAM was never really an airline but a set of two flying with the same name/livery and distinct partners.

I wonder if it would not do better if LATAM split into two where the LAN (Chilean side) could ditch Colombia and protect Equador (the only airline there now...) whilst TAM (Brazilian side) could let Argentina go and keep Paraguay (it old TAM Mercosur arm). DL would partner LAN with QR keeping their investment solely with TAM. Dunno where AA would come up to since it has already an agreement with GOL...

Wishful thinking but I feel that the LAN/TAM merger was never a really a good marriage in the end. Two great airlines that were not bound to merge

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