Latam Airlines will release at least 2,700 people in Brazil, including pilots. The company declared bankruptcy in May due to the effects of the spread of the new coronavirus. Before the pandemic, the company employed about 43,000 people worldwide.
Many airlines around the world are on the verge of bankruptcy due to the coronavirus pandemic. The major layoffs in the Chilean-Brazilian airline should help restructure debts amounting to $ 18 billion (about 401 billion crowns). The Brazilian media informed about it, the company’s management did not comment on it.
Latam Airlines is the largest airline in Latin America. According to O Globo and O Estado de S. Paulo, the company will start firing in the coming week. He first asks the employee if at least some of them do not want to leave voluntarily.
The planned layoffs are part of an effort to reduce the size of the company and come in response to the inability of management and union representatives in Brazil to reach an agreement on temporary reductions in working hours and wages. The company has the most employees in Brazil and Chile.
When the company applied for legal protection from creditors in the United States in May, it was the largest airline in the world seeking emergency reorganization due to a pandemic caused by the spread of a new coronavirus.
Latam Airlines can also fly in creditor protection mode. Subsidiaries in Argentina, Brazil and Paraguay are not included in the application submitted in the USA. The company is headquartered in Chile, but their Deposit Receipts (ADRs) are traded in the United States. It is similar to shares, but their holders have limited rights. In the meantime, ADRs were withdrawn from the New York Stock Exchange and later moved to the unregulated market.
The company stated in May that it had secured $ 900 million (approximately CZK 20 billion) from its shareholders for loan financing. In total, it had about $ 1.3 billion at hand.
The largest shareholder of the airlines is the American airline Delta Air Lines. Last year, for $ 1.9 billion, it acquired a roughly one-fifth stake in the company. Latam Airlines was established in 2012, when the Chilean airline Lan took over the Brazilian competitor Tam.
The coronavirus pandemic has almost virtually stopped passenger air travel. Airlines are now facing heavy losses. A few days ago, the Irish low-cost airline Ryanair Holdings reported a loss of five billion. Germany’s Lufthansa said it would close a fifth of senior positions and 1,000 positions in the administration due to the crisis. Air France-KLM fell to a loss of € 1.55 billion (CZK 40.7 billion) in the second quarter, and Japanese air carrier Ana Holdings suffered a record net loss of yen 108.8 billion (over CZK 23 billion) in the first financial quarter .
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