BUENOS AIRES – LATAM Airlines Group has said its Argentine subsidiary will cease operations indefinitely, cancelling all domestic flights, its first major cutback since filing for bankruptcy protection.
The announcement fell short of saying the company, Latin America’s largest airline, will entirely wind down its subsidiary, although it is unclear if it will ever resume operations.
A LATAM spokesman said the subsidiary will begin a government process in Argentina before it can lay off 1,715 employees. The airline said it will not fly domestically in Argentina but will maintain international flights, managed by other subsidiaries.
#AtenciónPasajeros: LATAM Airlines Argentina cesa operaciones en el país. LATAM Airlines Group y sus otras filiales seguirán operando las rutas internacionales a EE.UU., Brasil, Chile y Perú para conectar a Argentina con el mundo. Más información en: https://t.co/A35v7b2CCD
— LATAM Airlines (@LATAMAirlines) June 17, 2020
As reported by the company, the measure will apply to both passengers and cargo personnel for an “undetermined” time.
“This news responds to the fact that, in the current conditions, aggravated by the impacts of the COVID-19 pandemic and by the difficulty of building structural agreements with the actors of the local industry, it is not possible to visualize a viable and sustainable project over time ” the firm said.
However, the airline stressed that the other subsidiaries of the Latam group “will continue connecting passengers from that country with Latin America and the world.”
LATAM Airlines Argentina will soon enable, through its official channels, responses and alternatives to all those passengers who have purchased tickets, in accordance with the following commercial policies:
NATIONAL ROUTES: If they bought the ticket with a credit card, the company will automatically return the purchase amount within 30 and 45 days to the same payment method. Otherwise, the passenger must enter their return at latam.com/administratuviaje
INTERNATIONAL ROUTES: They may change the flight date without cost or fare difference. This is subject to the availability of the cabin and the validity of the ticket, which corresponds to one year from the start date of the trip.
They can also request a travel voucher to use until December 31, 2021 on any LATAM route.
TICKETS EXCHANGED WITH MILES FOR ANY DESTINATION: They will be able to request the return of the ticket in miles in their LATAM Pass account through latam.com; taxes will be paid in the same form of payment used.
Rueters reported Wednesday that LATAM blamed the decision in part on Argentina’s government, which has imposed one of the world’s toughest travel bans, drawing an outcry from the industry.
LATAM said “local industry actors” in Argentina had been difficult to deal with and “made it impossible to foresee a viable and sustainable long-term project.” LATAM’s competitors have accused Argentina’s government of blindsiding them.
A source at Argentina’s transport ministry, which regulates air traffic, argued nothing had been decided yet. “We have to wait for LATAM to meet with the labor ministry,”
Airlines around the world are reeling from the coronavirus pandemic but especially so in Latin America, where governments have been reluctant to offer state aid to carriers while also imposing tougher travel bans than in other regions.
LATAM’s top rival, Colombia’s Avianca Holdings, has also filed for bankruptcy protection and liquidated its subsidiary in Peru.
Argentina’s market is dominated by state-owned airline Aerolineas Argentinas. LATAM was the No. 2 player in the country, followed by ultra low-cost rivals Flybondi and JetSMART, which have made significant inroads in recent years.
LATAM also operates domestic flights in Chile, Peru, Brazil and Colombia. The Argentine unit is not part of its bankruptcy restructuring process.