LATAM loses $890 million in the second quarter due to the impact of the pandemic.

LATAM Airlines Group, the largest air transport group in Latin America, recorded net losses of $890 million (EUR 745 million) in the second quarter, which means multiplying by more than fourteen the ‘red numbers’ of $62.8 million (EUR 52.6 million) in the same period in 2019, according to data reported by the company on Wednesday.

In addition, the company’s revenues stood between March and June at 571.9 million dollars (478 million euros), representing a fall of 75.9% over the same period last year, a figure that is explained by the drastic reduction of the operation after the closure of borders and travel restrictions by the impact of Covid-19.

This decline is due to a 93.9% decrease in revenues from
passengers, which was partially offset by an 18.4% increase in
the cargo income. Total operating costs decreased by 45.6% in the second quarter to 1,266.7 million (‘1,060 million).

“These results reflect the profound impact that the crisis has had on the aeronautical industry and reaffirm the need to transform the group to guarantee its sustainability in the medium term. We will continue working to adapt to this new environment and transform LATAM into a more agile, competitive and efficient company,” said Roberto Alvo, the group’s CEO.

During the quarter, LATAM Airlines Group subsidiaries in Brazil and Chile operated with limited capacity, although subsidiaries in Ecuador and Peru resumed domestic operations in June and July respectively.

Job cuts and financial reorganization

As a result of the impact of the pandemic, from the beginning of the second quarter to date, the total number of employees in the group has decreased by approximately 12,600, with a current workforce of about 30,000.

On May 26, in view of the effects of the Covid-19 on the global aviation industry, LATAM Airlines Group and its subsidiaries in Chile, Peru, Colombia, Ecuador and the United States voluntarily underwent a financial reorganization process under U.S. bankruptcy law.

During this quarter, LATAM Airlines Argentina announced the cessation of its operations indefinitely due to local industry conditions, exacerbated by the Covid-19 pandemic that made operations unviable. However, LATAM Airlines Group and its other subsidiaries will continue to operate to and from Argentina, connecting passengers and cargo, to destinations throughout South America and the world.

In addition, on July 9, LATAM Airlines Brazil became part of the voluntary reorganization process under Chapter 11 protection in the United States carried out by LATAM Airlines Group and its subsidiaries.

By EuropaPress