LATAM Airlines Group is definitely not interested in selling its Brazilian branch, the company’s CEO said earlier this week. After a week of stories following Azul’s supposed interest in TAM Brazil, the largest South American airline is trying to put to rest the rumors. Let’s investigate further.
LATAM will not sell its Brazilian branch. In this picture, we see a LATAM’s A350 (the first they received, actually), a plane that is no longer with the airline. Photo: Vincenzo Pace | Simple Flying
The plan is to exit Chapter 11 this year
Roberto Alvo, LATAM Airlines Group CEO, categorically denied any interest in selling the Brazilian subsidiary. In an interview with EFE, he said,
“(I want to say) categorically and emphatically, that our Brazilian company nor any other actives LATAM has, is on sale.”
He then added that LATAM plans to emerge from its Chapter 11 bankruptcy process this year. Once the Group is out, it will have highly competitive costs and will be able to put up a fight in every market, Alvo said.
This rumor is not new; last year, the Brazilian Equity Research team of Bradesco BBI Bank suggested that LATAM’s best option would be to sell TAM to Azul.
Every single time the rumor has emerged, LATAM has quickly tried to put to rest the story. Last week, the airline sent the following statement to Simple Flying,
“LATAM Group intends to compete in Brazil and other markets aggressively and doesn’t have the intention of selling or breaking apart its Brazilian, or any other, branch. LATAM Group has not received any acquisition proposal. The ending of the domestic codeshare by LATAM is not related to this topic.”
LATAM is planning to emerge from its Chapter 11 bankruptcy process this year. Photo: Vincenzo Pace | Simple Flying
One year in Chapter 11: how is LATAM going?
LATAM filed for a Chapter 11 bankruptcy process at the end of May 2020. It became the second airline in Latin America to do so, following the steps of Avianca. Later on, Aeromexico would join as well.
In 2020, the airline had a 69.87% decrease in passenger revenue, according to stats provided by ch-aviation. It also posted a 61.86% decrease in passenger figures going from 74.18 million travelers in 2019 to 28.29 million.
The highlight of LATAM’s business during 2020 was the cargo division. It soared and had such results that the Group is increasing by 90% its freighter fleet in the next two years.
One year after, LATAM seems to be doing as well as it can. Roberto Alvo said,
“Today, we are good, financially speaking. We finished the first quarter with US$2.6 billion in liquidity, which is the biggest in absolute and relative terms for any company in the region. We trust LATAM will exit the crisis strengthened, with an unbeatable cost structure in the region.”
LATAM is the largest airline group in Latin America. Photo: Getty Images.
What can we expect going forward?
LATAM is currently expecting that it will have a capacity of around 60% to 80% when the year ends. The rates are even higher in Brazil, as it expects to be close to 90% by December.
Roberto Alvo said that LATAM could go back to 100% within the next two years. He also said that a few airlines would disappear in the next few years due to this crisis’s heavy toll.
He added that Latin America has more capacity than demand, and this will drive ticket prices down and put pressure on airlines in the region.
What do you think of LATAM’s plans? Let us know in the comments.
Article Source simpleflying.com