Latam maintains "complex" negotiations with Chile, Brazil and Colombia



Latam, one of the main airlines in Latin America, reported on Thursday that it is negotiating aid with the governments of Chile, Brazil and Colombia for the losses caused by the pandemic, but warned that the result of the talks is still "difficult" to anticipate.

"The talks are, they exist, they are difficult to prevent right now. They are generally complex conversations because they are difficult issues and I do not think that one can say which one is more or less advanced," Latam CEO Roberto said at a press conference. Alvo.

The executive assured that the group, born from the merger between Chile's Lan and Brazil's Tam in 2012, a priori "does not oppose any measure" and is "willing" to study any option.

"The company is obviously analyzing other alternatives if it comes to not having the support of governments or not full support," said the director, who described the situation of the airline industry as "incredibly delicate."

Among those alternatives, Alvo listed the "reconditioning of liabilities", the postponement of investments or the search for support from shareholders, including Delta Airlines and Qatar Airways, which in turn are expected to receive aid from States. United and Qatar, respectively.

"We are obviously available to shareholders and the channels are obviously open," he added.

The company also does not rule out issuing bonds, although Alvo acknowledged that right now it is an option that seems complicated because "the debt market is closed to the industry."

"If you look at the Latam bond ... you realize that the discount rates are extremely high and that demonstrates the lack of capital available for the industry at this time," he explained.

LESS ACTORS IN THE INDUSTRY

Latam has been since the beginning of April with 95% of its passenger flights suspended due to lower demand and the closure of borders decreed in different countries to stop the COVID-19 pandemic.

During May, the airline will only operate some internal flights in Chile and Brazil - the airspace in Colombia, Argentina and Ecuador, the other countries where it has domestic operations, is totally closed - and several weekly flights between Santiago and Miami and Sao Paulo and Miami .

The group, which before the health emergency flew to 145 destinations in 26 countries and offered 1,400 daily flights, calculates that during the second half of the year it will be able to recover between 50% and 70% of its operations.

"This estimate is very variable, we still don't even know when the restrictions will be lifted," said the director, who said that the airline industry will be "smaller" after the pandemic.

The International Air Transport Association (IATA), which brings together nearly 300 global airlines, revealed this week that global passenger demand fell 52.9% year-on-year in March and that companies' revenues will drop to more than the half in 2020.

The new coranavirus, whose first case was detected in China last December, has infected more than 3.1 million people worldwide and caused more than 230,000 deaths. The United States is the country with the most infections and the most deaths, followed by Italy and Spain.

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