Latam Airlines lost $890M in the second quarter

SANTIAGO, Aug 19, 2020, Merco Press. Latam Airlines, South America’s largest carrier, on Tuesday said it had laid off 12,600 employees since March – or almost 30% of its pre-coronavirus workforce – due to the pandemic that has upended the global travel industry. The company also reported a net loss of US$ 890 million for the second quarter, Merco Press reported.

The carrier went from employing almost 43,000 people across Latin America and the United States to 29,957 as of Tuesday, the company said.

“COVID-19 has had a very significant impact, which is reflected in the company’s numbers,” LATAM CFO Ramiro Alfonsin told journalists.

While employees already had their salaries cut by half in late March when the pandemic led to widespread travel restrictions in the region, it said its remaining employees are now facing cuts of 20% through September.

LATAM and its rivals are struggling to preserve cash while operating just a small fraction of their usual flights. The airline has said it will need to be a smaller carrier for years to come, and it is unclear whether there will be more job cuts in the future. Cutting down its workforce has helped preserve some liquidity.

The carrier posted a 75% drop in revenue between April and June due to widespread travel restrictions around Latin America.

LATAM’s Chapter 11 filing has allowed it to raise more than US$ 1.3 billion in cash from investors, although it still needs the approval from a bankruptcy judge before it can access the money.

Alfonsin said the airline had operated during the quarter at 6% of its normal capacity and that demand in Brazil, its largest market, was showing some signs of recovery. He added LATAM ended the quarter with a total cash position of US$ 1.4 billion.

Likewise Latam announced it was delaying the resumption of 32 international services, some of them already listed to return in August or September, but the latest information indicates that the suspension now has been extended until at least 31st December 2020. Although the company says decisions can be reviewed.